Pure Storage (PSTG) stock surged 22% on Wednesday, closing at $65.27, its highest level since July. The company reported third-quarter earnings and sales that beat expectations, with adjusted earnings of 50 cents per share on sales of $831 million. However, the key factor behind the stock’s rally was Pure Storage’s announcement of a “design win” with a top-four hyperscale cloud provider for its DirectFlash data storage technology.
A design win is typically associated with tech giants such as Amazon, Microsoft, Google, and Meta. Pure Storage did not name the company in its press release, but analysts believe it refers to one of these major players. The announcement marks a significant step in the company’s push to convince major enterprise buyers to switch to its flash storage from standard hard disk drives.
Analysts are cautiously optimistic about the impact of this design win on Pure Storage’s sales and growth prospects. Wedbush analyst Matt Bryson rates Pure Storage stock as “outperform,” citing the company’s solid Q3 results and the potential for the hyperscale design win to drive future growth. The company now expects fiscal year sales of $3.15 billion, up from its previous guidance of $3 billion.
The stock has regained some lost ground after a recent slump following a so-so second quarter report in August. The hyperscaler win could help rebuild momentum and push the stock towards an all-time high of $70.41 reached in June.
Source: https://www.investors.com/news/technology/pure-storage-stock-earnings-q3-2024-ai