10 Best Stocks to Buy and Hold For 5 Years According to Cathie Wood

7. Pure Storage, Inc. (NYSE:PSTG)

Ark Investment’s Q4 2020 Investment Stake: $930 million

Number of Q1 2024 Hedge Fund Investors: 41

Share Price Performance Since 2020 End: 183.99%

Pure Storage, Inc. (NYSE:PSTG) is a computer hardware company that provides hardware storage systems for data center use and software products to streamline cloud operations. Cathie Wood’s firm acquired a $53 million stake in the firm in Q1 2020, which peaked at $930 million in Q4 2020. The stake, as of Q1 2024, is $22.9 million. The AI wave has been kind to Pure Storage, Inc. (NYSE:PSTG), as the shares are up 77.6% year to date. Pure Storage, Inc. (NYSE:PSTG) offers lucrative SaaS services through its Evergreen model, which allows customers to manage their storage consumption according to need. This allows the firm to augment its hardware revenue through a software based recurring model, and it also offers customers the unique ability to speed up their data processing through an ‘all flash’ storage platform that removes slow SSD storage from the computer architecture. This mix of hardware and storage platforms, coupled with Pure Storage, Inc. (NYSE:PSTG)’s Pure//E family which enables low cost round the clock flash storage access enables the firm to capitalize on most segments of the data storage market which could help it in today’s boom in the data center market.

However, since Pure Storage, Inc. (NYSE:PSTG)’s business model is dependent on business spending, the continued impact of high rates on budgets might create headwinds. On this front, here’s what management had to say during the Q1 2025 earnings call:

Moving on to the market as a whole, we have not seen a significant change in the overall macro environment or customers’ intentions to buy. While we have great enthusiasm for our opportunities in AI, spending on AI may put pressure on other parts of IT budgets.

We believe that the storage market will fare relatively well in this IT economy, but have yet to see a major inflection. Overall, we believe that we are well positioned in all of the segments we compete in and we will continue to gain share across our markets. Our leadership position is now clearly demonstrated by our competitors’ increased fervor to mimic our strategy and our messages. We also believe that long-term secular trends for data storage are no longer based on the expectation of commoditized storage, but rather on high-technology data storage systems, and run very much in our favor.