Goldman Sachs’ Best Phase 2 AI Stocks: Top 24 High Conviction AI Stocks

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21. NetApp, Inc. (NASDAQ:NTAP)

Year To Date Share Price Gain: 47%

Number of Hedge Fund Investors in Q2 2024: 44

NetApp, Inc. (NASDAQ:NTAP) is a diversified storage hardware and software company that caters to the needs of the cloud computing and data center industries. Its products enable cloud operators to physically store their data on flash drives and manage storage through software tools. Since there is no AI without massive amounts of data to train the models, NetApp, Inc. (NASDAQ:NTAP)’s products are essential to enable businesses to run their AI models and workloads. The firm is an industry leader when it comes to unstructured data management, which is key for unsupervised training for AI models. Additionally, NetApp, Inc. (NASDAQ:NTAP)’s dual business of selling hardware and software allows it to command high ASPs for strong top line profits and beefy margins for sizeable bottom line income. The company also expects to bring in $40 billion in revenue through its flash segment by 2027 by providing the high speed memory modules that are key for AI data work.

Ariel Investments mentioned NetApp, Inc. (NASDAQ:NTAP) in its Q2 2024 investor letter. Here is what the fund said:

“Market leader for computer storage systems, NetApp, Inc. (NASDAQ:NTAP) advanced over the quarter following a top- and bottom-line earnings beat. Strong growth across its All-Flash, Block, Artificial Intelligence (AI) and Public Cloud products, tight cost controls and operating margin expansion drove the outperformance. Additionally, management raised the quarterly dividend, announced a buyback program and reiterated its commitment to return 100% of free cash flow to shareholders in 2025, further aiding shares. We believe NetApp is well-positioned to benefit from its cloud storage service as it helps companies move data between public and private clouds seamlessly. Meanwhile, we remain excited about the company’s digital transformation projects involving business analytics, AI and data security.”

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