NTAP has strong fundamentals and raised guidance, but margin pressure from input costs is a negative catalyst for the stock.

NetApp announced earnings of $2.58 per share , exceeding estimates of around $2.13. And if you look at some of NetApp's revenue figures, yes, $2.03 billion in revenue. That was a 30% year-on-year increase.

All Flash storage arrays generated $1.31 billion in revenue. That was a 47% year-over- year increase, making it the primary growth driver for NetApp. Hybrid cloud revenues reached 1.82 billion.

That was a 30% increase, and public cloud revenues rose by about 28% year-over-year.

Here I think you can see the pain point due to the rising costs on "NetApp" in the future. Input costs have started to have a slight impact on profit margins. Therefore, the expectations were a little disappointing.

Gross profit margins were around 67%, slightly lower than current market expectations, but they raised expectations for the company in the future. Full fiscal year 2027 revenues have been significantly increased to between 7.97 and 8.225 billion.

That was about 650 million higher than their previous forecast. So, good forecasts, good numbers, good growth rates, but there is one small caveat that will cause the stock to fall, and that is the margins.