NTAP Should I Buy
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NetApp Inc (NTAP) is not a strong buy at this moment for a beginner investor with a long-term strategy. While the company has shown slight improvements in financial performance, the recent downgrade by Morgan Stanley and the cautious sentiment surrounding IT hardware growth suggest a defensive stance. Additionally, no strong proprietary trading signals or significant positive catalysts are present to justify immediate action.
The MACD is positive at 0.832 but contracting, indicating weakening momentum. RSI is neutral at 38.104, and moving averages are converging, showing no clear trend. The stock is trading below the pivot level of 100.71, with key support at 95.901 and resistance at 105.519.
Financial performance in Q2 2026 showed revenue growth of 2.83% YoY, net income growth of 2.01% YoY, and EPS growth of 6.34% YoY.
Gross margin increased to 71.96%, up 1.37% YoY.
High call volume in the options market suggests bullish sentiment.
Morgan Stanley downgraded the stock to Underweight with a reduced price target of $89, citing the slowest hardware budget growth in 15 years and inflationary pressures.
Analysts are cautious about near-term growth challenges in the US Public Sector and EMEA.
The stock is trading below its pivot level, indicating potential weakness.
In Q2 2026, revenue increased to $1.705 billion, up 2.83% YoY. Net income rose to $305 million, up 2.01% YoY. EPS increased to $1.51, up 6.34% YoY. Gross margin improved to 71.96%, up 1.37% YoY.
Recent analyst activity is mixed but leans negative. Morgan Stanley downgraded the stock to Underweight with a price target of $89. However, other analysts like Barclays and Northland have raised price targets, citing strong margins and growth in All-Flash and Public Cloud Services. The consensus reflects caution amid macroeconomic uncertainties.
