Shares of Pure Storage (PSTG) are up 30% on Aug. 28 and pacing for a record close after the data storage firm announced a new deal with technology giant Meta Platforms (META).
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Pure has announced that it secured an agreement with Meta Platforms to be the social media company’s key storage provider and a contract to help Meta with its artificial intelligence (AI) storage needs. Pure Storage said that it expects to deploy one to two exabytes with Meta by the end of its current fiscal year. One exabyte is equivalent to one billion gigabytes.
In addition to the Meta Platforms deal, Pure Storage said that it is seeing increased interest for its AI capacity from other mega-cap technology companies and hyperscalers that want to use its cutting-edge technology that is compatible with large AI workloads and storage needs.
Quarterly Results
The Meta Platforms deal was announced along with Pure Storage’s second-quarter financial results. The company reported revenue growth of 13% to $861 million, topping the $846.9 million expected on Wall Street. Earnings per share of $0.43 surpassed the $0.39 average estimate of analysts.
Management at Pure Storage also raised their revenue guidance for the year to between $3.6 billion and $3.63 billion from $3.52 billion previously. The big rally in PSTG’s stock on Aug. 28 raises its market cap to $26 billion, and puts its share price at an all-time high of $79.16. The stock is now up 29% this year.
Is PSTG Stock a Buy?
The stock of Pure Storage has a consensus Strong Buy rating among 17 Wall Street analysts. That rating is based on 13 Buy and four Hold recommendations issued in the last three months. The average PSTG price target of $77.06 implies 2.67% downside from current levels. These ratings might change after the company’s financial results.
