We recently published a list of Top 10 AI News and Analyst Ratings You Should Not Miss. Since Pure Storage Inc (NYSE:PSTG) ranks 9th on the list, it deserves a deeper look.
Investors are on tenterhooks as Jensen Huang’s AI giant is about to release earnings. Gene Munster, Deepwater Asset Management managing partner, said in an interview with CNBC that the broader market can see a pullback if Blackwell-related delays show a wider impact on the AI chips market. The analyst predicted that it’s going to be a “difficult week” for major tech companies.
However, Munster is highly bullish on the broader AI space for the long term.
“I still think that we are in an early innings of a 3 to 5 year tech bull market that is powered by AI, and I think all these big tech companies are going to do well over the next couple of years,” Munster said.
The analyst said that Jensen Huang has indicated in the previous quarters that the demand for AI chips is more than what his company could manage in the short term, and if he reiterates this in the upcoming results, it would give a strong signal to investors about the AI potential.
“There is a lot of awareness about AI but I think the significance of what it’s gonna do is still underappreciated by the market.”
In this article, we compiled the most important latest AI news and analyst ratings around major AI tech stocks. With each company we have mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Pure Storage Inc (NYSE:PSTG)
Number of Hedge Fund Investors: 38
Pure Storage Inc (NYSE:PSTG) is another under-the-radar AI stock that recently got attention from Wall Street. Piper Sandler started covering the stock with a Neutral rating, acknowledging the company’s strong position in the IT data storage market, which is increasingly shifting towards all-flash solutions like those Pure offers. Analysts James Fish and Quinton Gabrielli pointed out that while the data storage market isn’t growing rapidly, the rise of AI data centers could boost spending on high-performance storage.
For example, Meta Platforms is using Pure’s FlashArray and FlashBlade products for its AI Research SuperCluster. However, Piper Sandler remains cautious about the high valuation and is waiting for a better entry point.
What makes Pure Storage Inc (NYSE:PSTG) a promising stock? The world is moving swiftly towards flash storage from hard disk drives (HDDs). However, about 90% of the enterprise world is still dependent on HDDs, and the AI and data center boom and the need for higher data retrieval speeds have lit a fire under their plans to move to all-flash storage solutions, which Pure Storage Inc (NYSE:PSTG) sells. Pure Storage believes that by 2028, almost all new data center storage will be flash-based, a trend that could significantly boost its business, as the company exclusively offers flash storage.
Another problem Pure Storage Inc (NYSE:PSTG) is solving relates to data fragmentation. A lot of companies are still fetching data from various sources, which makes the speed of their AI engines and processing slow. Pure Storage is offering a platform for data integration. The company talked about this in the latest earnings call
“AI inevitably calls customers’ attention to the fragmented state of their data caused by their disparate data storage infrastructure. Data stored on widely diverse platforms, with different operating and management systems, which are siloed and individually managed are unable to feed real-time data to AI inference engines. The Pure Storage Inc (NYSE:PSTG) platform strategy provides a unified and integrated data storage and delivery system across customers’ various data environments. It facilitates seamless management and data access across data centers and the cloud, with simplified universal policies and management.”
Overall, Pure Storage Inc (NYSE:PSTG) ranks 9th on Insider Monkey’s list titled Top 10 AI News and Analyst Ratings You Should Not Miss. While we acknowledge the potential of PSTG, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than PSTG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
