NetApp delivered a blowout earnings print on May 28 and the Street spent Friday morning catching up — but shorts were already rebuilding before the dust had settled.
The earnings reaction was sharp. The stock jumped 22% on May 29 to $174.29, extending a monthly gain now close to 61%. The prior note flagged shorts trimming into the rally at $138.95. That trimming phase is over. Short interest has reversed, climbing 6% on the week to 11.6% of free float — back above the level where the earlier note identified sellers paring back. The official FINRA count, settled through May 15, put short shares at 23.9 million with days to cover at 10.6. That is a heavy position by any measure, and it is growing again even as the stock prints fresh highs. The divergence is the story: the rally has not closed the short book; it has repriced it.
Borrow conditions complicate the short narrative in an important way. Despite the increase in short interest, the lending market remains entirely loose. Availability has actually improved this week, rising to 687% — meaning almost seven shares remain available to borrow for every one currently shorted, the most comfortable reading since late April. Cost to borrow is 0.48%, essentially unchanged over the week and still near the floor of its 30-day range. There is no mechanical pressure on the existing short book. Shorts rebuilding here are doing so by choice, not by necessity, and they face no material cost to maintain their conviction. Options, though, tell a different story: the put/call ratio jumped to 0.62 on Friday, more than two standard deviations above its 20-day average of 0.39. That is the most defensive options positioning in several months and sits in the upper half of the 52-week range. The combination — cheap borrow, loose availability, but elevated put demand — suggests hedged caution rather than aggressive directional pressure.
The Street repriced hard on Friday. Barclays raised its target from $120 to $199, maintaining Overweight — the most aggressive move of the morning and the only major firm now with a target above the current price. Morgan Stanley lifted its Underweight target from $88 to $137, still well below trading levels. The middle of the Street landed between $150 and $185: JP Morgan, BofA, Citigroup, and Wedbush all raised to $150; Wells Fargo moved to $180; Susquehanna to $185; Evercore to $170. The consensus arithmetic is notable — the mean target sits at $163, roughly 6% below where the stock closed Friday. Most of the Street has repriced positively but is not yet chasing the print. With a P/E near 16x and an EV/EBITDA around 11.5x, valuation does not look stretched relative to the growth story being rewarded today. The ORTEX short score of 61 reflects an elevated but stable short thesis — not a crowding extreme, but meaningfully above neutral.
Peer context adds weight to the read. HPE jumped 27% on the week and DELL surged 66% — the latter benefiting from its own results cycle in a sector-wide repricing of enterprise infrastructure. HPQ added 23%. NTAP's 25% weekly gain looks measured against DELL but roughly in line with the infrastructure cohort more broadly, suggesting the move is sector-driven as much as it is company-specific.
The setup heading into next week has an unusual shape. Shorts are rebuilding into a 60% monthly move, borrow is free, and a cluster of analyst targets now sit below the current price. The key variable to watch is whether the short interest trend — up 6% this week alone — continues to accelerate, and whether the options market's defensive tilt deepens or unwinds as the post-earnings positioning shakes out. The next earnings date is pencilled in for September 2.
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