Goldman Sachs’ Best Phase 2 AI Stocks: Top 24 High Conviction AI Stocks

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

Year To Date Share Price Gain: 52.79%

Number of Hedge Fund Investors in Q2 2024: 38

Pure Storage, Inc. (NYSE:PSTG) is another storage focused hardware and software company that caters to the needs of the data center industry. The firm operates primarily through its Evergreen model which enables businesses to manage their storage consumption based on need instead of pre defined packages. This makes Pure Storage, Inc. (NYSE:PSTG)’s products attractive to businesses on a budget, and the firm also competes in the market by enabling users to bypass slower solid state drives from their storage architecture and rely primarily on faster flash storage instead. Pure Storage, Inc. (NYSE:PSTG)’s Pure//E family of products provides an end to end flash storage option for all kinds of data sets and offers storage for as much as 30 petabytes of data. However, while up 52.79% year to date, the shares are down by 13% since late August after the firm revised downwards its STaaS bookings downward by $100 million for a 25% growth over the previous estimate of 50% growth.

Pure Storage, Inc. (NYSE:PSTG)’s management attributed this to tighter evaluations. Here’s what they shared during the Q2 2025 earnings call:

“Well, I think your supposition would be correct if customers — the same customer was switching from an Evergreen//One deal to a CapEx deal. What we’ve seen instead is large opportunities — large Evergreen//One opportunity staying opportunities longer than we expected and therefore stretching out. A little bit whether that’s based on caution or whether that’s based on by the customer or whether that’s based on other — we had indicated that customers are looking very closely at their subscription expenses now given increases in software and SaaS expenses that were raised over the year. We’ve yet to really fully diagnose that. But what we’re seeing is a lengthening of large deal size Evergreen//One opportunities.”