During the lightning round of the October 1 episode of Mad Money, a caller said they had held NetApp, Inc. (NASDAQ:NTAP) stock for years with little movement before it surged from an April low of $96 to $216. They asked if they should hold or sell their position. In response, Jim Cramer said:
I got to tell you, you want to hold that one. I mean, I think you got a great situation, just a great situation. I wouldn’t worry. I like that very much.
In December 2025, Cramer discussed the stock as someone who had held the stock for 25 years inquired about it.
NetApp (NTAP) made our list of 12 Best Data Storage Stocks to Buy Right Now. See which stocks ranked ahead of NTAP.
Flash Storage Growth and a New AI Offering
NetApp, Inc. reported revenue of approximately $2.03 billion for its fiscal 2027 first quarter, which ended July 31, up 30% year-over-year. All-flash revenue increased 47% to approximately $1.3 billion, while public cloud revenue rose 28% to $206 million. Adjusted earnings per share climbed to $2.58 from $1.55. It was one of the stocks that beat Wall Street’s earnings calls.
The company is also introducing products aimed at AI infrastructure. On September 29, NetApp unveiled its Novus architecture to address storage bottlenecks in AI factories and large GPU clusters. The design separates metadata from stored data, allowing performance and capacity to expand independently. It combines NetApp’s ONTAP technology with qualified Supermicro infrastructure. The announcement gives investors another development to watch beyond the latest quarter. A product designed for larger AI workloads could expand NetApp’s opportunities. The company also recently deepened its VMware cloud integration.
Cash Generation Has Yet to Match the Earnings Momentum
NetApp, Inc.’s cash-flow figures were less impressive than its revenue growth. First-quarter operating cash flow declined to $503 million from $673 million a year earlier. Capital expenditures increased to $102 million from $53 million, leaving free cash flow of $401 million, compared with $620 million. The cash flow statement also showed $176 million of cash used for inventory. While it does not point to a demand problem, it helps explain why stronger reported earnings did not translate into stronger cash generation during the quarter.
The valuation adds another consideration following the share-price advance. October 5 readings put NetApp at approximately 22.6x forward earnings, compared with 21x for Dell Technologies. Dell has a broader business spanning PCs and servers as well as storage, so the comparison is imperfect. Nevertheless, NetApp’s premium means continued execution matters to sustaining investor confidence.
More Funds Take Positions as Short Interest Persists
NetApp, Inc. appeared in 47 hedge fund portfolios as per Insider Monkey’s second quarter database, up from 38 in the preceding quarter. With nearly 2.5 million shares,
Lyrical Asset Management had the biggest position during the quarter. While the firm reduced its position by 3%, another hedge fund, Arrowstreet Capital, increased its holding by 56% to approximately 1.54 million shares during Q2. Additionally, short interest stood at 5.18% of the public float. While the increase in fund holders points to broader institutional participation, the short position suggests that the stock’s advance has not won over everyone.
NetApp’s flash and cloud businesses are growing, and its AI offering is developing. It seems that Cramer is comfortable holding through that progress. A recovery in cash generation would make the company’s recent improvement more complete and give shareholders firmer support for staying invested.
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