AWS Transform now enables migration of block storage data for NetApp Inc.’s (NASDAQ:NTAP) unified data storage operating system, NetApp ONTAP, directly to Amazon FSx. The move allows for such migrations to be carried out in the same wave as compute and network. For NetApp, this integration broadens the total addressable market for the company beyond its existing users. It would also turn AWS migration projects into new cloud storage channels.
NetApp made it to our earlier list of the 12 Best Data Storage Stocks to Buy Right Now, with its shares gaining approximately 116% year-to-date. Which 10 companies ranked ahead of it?
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A New Migration Channel
The capability would help enterprises in migrating storage and database workloads from on-premises and cloud environments directly to the managed FSx for ONTAP service. NetApp executive Pravjit Tiwana noted that cloud migration projects often run longer and cost more than planned because customers must move applications, servers, networking, and storage separately. He said the combined offering simplifies the process, lowers migration risk, and helps customers reach AWS faster without changing how their applications operate.
This eradicates the need for separate migration tools, intermediate storage platforms, and the additional cost and risk associated with them. Whether customers come from NetApp ONTAP or any other on-premises block storage, they would land on a production-ready, fully-managed service that pairs ONTAP’s enterprise features with AWS scalability and resiliency. NetApp product strategy is in focus as the company introduces new features for NetApp Trident software 26.06.
Reliance on AWS Raises Questions
Amazon FSx for ONTAP increases NetApp’s reliance on AWS for the distribution and adoption of this particular cloud service, exposing it to AWS’s pricing decisions and competing storage offerings. The AWS portfolio contains additional native storage solutions as well, which could be favored by AWS Transform in the future. This would take away NetApp’s current leverage for its own offerings.
Additionally, migration of customers away from on-premises hardware could have implications for NetApp’s conventional systems. This could cannibalize NetApp’s traditional hardware revenue, although increased cloud consumption may partly offset the impact. Finally, it is important to highlight that the concept of automated migrations is still relatively new. Hence, execution risks and performance disruptions are possible, which could adversely affect customer confidence.
A Triple-Digit Rally Backed by Real Fundamentals
NetApp has delivered around 102% year-to-date return in 2026, which represents more than fivefold higher return compared to the broader S&P 500. has a market capitalization of approximately $45.39 billion, and it has transitioned from a steady value pick to a market leader within its category.
Despite such a rally, the valuation multiples indicate potential for further upside. The stock trades at a trailing P/E of approximately 33.3x and a forward P/E of 23.7x. Such a forward multiple ranging within low 20s does not appear too demanding for a business that reported 30% year-over-year revenue growth in Q1 FY2027, although sustaining that pace will be important to justify its valuation. Investors would want to explore this other Fintech that is positioned for growth with its robust cash app numbers.
Institutional Sentiment
Data tracked across 1,000+ hedge funds by Insider Monkey reveals an increasing number of smart money managers invested in NetApp. As per 13F filing data for Q2 2026, a total of 47 hedge funds held positions in the stock compared to 38 by the end of the first quarter.
According to Yahoo Finance database, BlackRock is the largest institutional investor with 18.9 million shares, representing 9.62% of outstanding shares. Other notable institutional names include Vanguard Capital Management and Vanguard Portfolio Management which hold 6.56% and 6.25% of outstanding shares, respectively.
Way Forward
The development would result in greater preference and visibility for NetApp as customers make storage decisions. This is because the AWS Transform is strongly integrated within the migration workflow. Deeper AWS integration could accelerate cloud adoption and support recurring revenue growth for NetApp. However, becoming the default storage destination is far from guaranteed, particularly as AWS also supports competing options such as Amazon EBS. The key test will be whether migration activity translates into sustained cloud revenue growth.
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