We recently published a list of Top 10 AI news and analyst reviews you shouldn’t miss. With Pure Storage Inc (NYSE:PSTG) ranking 9th on the list, it deserves a closer look.
Investors are on edge as Jensen Huang’s AI giant is about to release its earnings. Gene Munster, managing partner of Deepwater Asset Management, said in an interview with CNBC that the broader market could see a decline if the Blackwell-related delays show a larger impact on the AI chip market. The analyst predicted it will be a “tough week” for big tech companies.
However, Munster is extremely optimistic about the broader AI field in the long term.
“I still think we’re in the early stages of a three- to five-year AI-driven technology bull market, and I think all of these big technology companies are going to do well over the next few years,” Munster said.
The analyst said Jensen Huang has indicated in previous quarters that demand for AI chips is greater than what his company can handle in the short term, and if he repeats that in upcoming results, it would be a strong signal to investors about AI potential.
“There is a high level of awareness of AI, but I believe the importance of its capabilities is still underestimated by the market.”
In this article, we’ve compiled the most important recent AI news and analyst ratings on the top AI technology stocks. For each company, we’ve mentioned the number of hedge fund investors. Why do we care about the stocks hedge funds invest in? The reason is simple: our research has shown that we can outperform the market by mimicking the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks each quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (Further details can be found here).
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Pure Storage Inc (NYSE:PSTG)
Number of hedge fund investors: 38
Pure Storage Inc (NYSE:PSTG) is another AI stock that has been flying under the public radar and has recently caught Wall Street’s attention. Piper Sandler initiated coverage on the stock with a neutral rating, acknowledging the company’s strong position in the IT data storage market, which is increasingly moving toward all-flash solutions like those offered by Pure. Analysts James Fish and Quinton Gabrielli noted that while the data storage market is not growing rapidly, the rise of AI data centers could boost spending on high-performance storage.
Meta Platforms, for example, uses 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 rapidly moving away from hard disk drives (HDDs) to flash storage. However, about 90% of enterprises still depend on HDDs, and the boom in AI and data centers, along with the need for faster data retrieval speeds, has fueled their plans to move to all-flash storage solutions, which Pure Storage Inc (NYSE:PSTG) sells. Pure Storage expects that by 2028, almost all new data center storage will be flash-based, a trend that could significantly boost the company’s business since the company exclusively offers flash storage.
Another problem that Pure Storage Inc (NYSE:PSTG) solves is data fragmentation. Many companies still get their data from different sources, which slows down the speed of their AI engines and processing. Pure Storage provides a platform for data integration. The company talked about this in the last conference call
“AI inevitably draws customers’ attention to the fragmented state of their data caused by their disparate data storage infrastructure. Data stored on very different platforms with different operating and management systems, siloed and managed individually, cannot deliver real-time data to AI inference engines. Pure Storage Inc’s (NYSE:PSTG) platform strategy provides a unified and integrated data storage and delivery system for customers’ diverse data environments, enabling 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 of the titled Top 10 AI news and analyst reviews you shouldn’t miss. While we recognize PSTG’s potential, we believe AI stocks promise higher returns and do so in a shorter time frame. If you’re looking for an AI stock that’s more promising than PSTG but worth less than five times its earnings, read our report on the cheapest AI stock.
READ MORE: Analyst sees a new $25 billion “opportunity” for NVIDIA And Jim Cramer recommends these 10 stocks in June.
Disclosure: None. This article was originally published on Insider Monkey.
