NetApp (NTAP) is expected to report better-than-expected fiscal Q4, driven by higher pricing and possible artificial intelligence-related deal wins, Wedbush Securities said in a note Tuesday.

NetApp reports Q4 earnings after the market close on Thursday.

The analysts said the company's fiscal Q4 sales are projected to "easily" top expectations. Bit shipments are expected to meet forecasts, while system pricing increased during the quarter. NetApp also appears to have raised prices early enough to limit pressure on gross margins because it was still using some lower-cost bits. Stronger pricing is also expected to support a positive fiscal Q1 guidance.

There are also signs that NetApp won a few large deals late in the quarter, possibly tied to AI-related demand, the analysts said, adding that while they do not yet see the company as having a competitive AI product offering, management may discuss growing traction in AI during the earnings call.

"We see reasons to believe NetApp results should improve in the near-term. However, we also believe the stock has moved to reflect the expectation, and we don't see some of the structural tailwinds that make us more positive," the analysts said.

Wedbush Securities reiterated its neutral rating and $115 price target on NetApp.

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