NetApp Inc. (NASDAQ:NTAP) is Another Warning Signal About the Market Cycle

NetApp Inc. (NASDAQ:NTAP) provided us with another negative signal about the market’s appetite to keep betting on the technology cycle. NTAP posted earnings and guidance on Wednesday afternoon, beating on the bottom line and guiding up, but was basically in-line with revs and guided for another quarter ahead that was just in-line with revs.

Yet, the stock was roasted in response, diving 6% in after-hours action. We would suggest this says more about the tone of the broad market right now than about the underlying trends driving things forward for NTAP. Tomorrow’s action will be all about whether or not the stock can find support. The $70/share level is a critical marker on the chart.

NetApp Inc. (NASDAQ:NTAP) trumpets itself as a company that provides software, systems, and services to manage and share date on-premises, and private and public clouds worldwide.

It offers cloud data services, such as ONTAP cloud storage data management and NetApp cloud sync data synchronization services; NetApp SaaS backup for Microsoft Office 365; NetApp cloud backup solutions; OnCommand management software and management integration tools; and NetApp private storage for cloud.

The company also provides cloud Infrastructure solutions, including FlexPod, a portfolio of pre-validated designs and integration; NetApp advisor converged systems; NetApp HCI enterprise-scale hyper converged cloud infrastructure; and NetApp StorageGRID Webscale object storage software.

In addition, it offers storage systems and software, such as all-flash arrays that support data management; hybrid arrays to deploy the speed of flash storage; NetApp ONTAP storage operating system; NetApp ONTAP Select, which offers robust enterprise storage services; NetApp flex array storage virtualization software; NetApp SnapCenter backup management software; NetApp SnapMirror data replication software; NetApp MetroCluster business continuity software; NetApp SnapLock data compliance software; SANtricity storage operating system; and NetApp SolidFire element operating systems.

In addition, it provides software and hardware maintenance, professional, and customer education and training services, as well as support solutions. The company serves energy, financial services, government, high technology, Internet, life sciences, healthcare services, manufacturing, media, entertainment, animation, video postproduction, and telecommunications sectors through a direct sales force and channel partners.


Expanding the Network

NetApp, Inc. has a strategic partnership with Lenovo to help customers modernize IT and enhance their digital transformation. NetApp has augmented this list, announcing today that it has partnered with DreamWorks to develop and oversee the studio’s customized Data Fabric approach, designed to enable expanded capabilities and future growth for the Glendale-based leader in family entertainment.

The company also announced a partnership with WuXi NextCODE, the world’s leading genomic data platform and analysis company, working to improve health for people around the globe. WuXi NextCODE will use NetApp Cloud Volumes for simplified deployment and optimized management of data-driven applications.

“Through focus and disciplined execution, NetApp again delivered strong results in the second quarter. We introduced a tremendous amount of innovation across our portfolio that helps us drive share gains, expand our available market, and set the industry agenda,” said George Kurian, chief executive officer. “Our consistent and strong performance reflects the clear differentiation of our technology and the strength of our business model, as well as our customers’ growing commitment to NetApp and value of our Data Fabric strategy.”

Even in light of this news, NTAP has had a rough past week of trading action, with shares sinking something like -6% in that time. That said, chart support is nearby and we may be in the process of constructing a nice setup for some movement back the other way. NTAP shares have been relatively flat over the past month of action, with very little net movement during that period, which has to been as an underlying positive signal of steady relative strength.

NetApp Inc. (NASDAQ:NTAP) has a strong balance sheet, with cash levels far exceeding current liabilities ($4.8B against $2.8B).

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