JPMorgan analyst Samik Chatterjee upgraded the rating for NetApp Inc (NASDAQ:NTAP) from Neutral to Overweight, while raising the price target from $150 to $160.

The company's revenue growth is likely to accelerate, driven by higher IT budgets for data centers and storage infrastructure of Enterprises looking to leverage AI use cases, according to JPMorgan.

The NetApp Thesis: Apart from higher enterprise spending, the company is also poised to benefit from its continued share gains from the recent pace of innovation, Chatterjee said in the upgrade note.

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"In addition to recent expansion in product portfolio via addition of C-series products, we expect more launches in relation to C-series products, Block storage (ASA products) as well as products based on disaggregated architecture, which will further enhance the already robust product portfolio and drive growth," the analyst wrote.

In late November, NetApp reported better-than-expected quarterly results.

The company's revenue growth could accelerate closer to the mid-point or higher-end of the company's latest guidance range, Chatterjee added.

"With resilient gross margins and operating leverage, we expect the modest revenue growth acceleration to be sufficient in relation to driving more material upsides to earnings estimates," Chatterjee further stated.

NTAP Price Action: Shares of NetApphad risen by 2.41% to $124.90 at the time of publication on Monday.

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