Pure Storage (PSTG) stock rocketed higher late Tuesday, after the enterprise data storage company reported third-quarter earnings and sales that beat expectations. The company also said it had won a “design win” with a top-four hyperscale cloud provider for its DirectFlash data storage technology.
Pure Storage said in a news release that it earned an adjusted 50 cents per share on sales of $831 million for its quarter that ended Nov. 3. Analysts polled by FactSet projected the Santa Clara, Calif.-based company would post adjusted earnings of 41 cents per share on sales of $815 million.
For the same period a year earlier, Pure Storage posted adjusted earnings of 50 cents per share on sales of $763 million.
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For the current quarter, Pure Storage guided for sales of $867 million. Analysts were previously projecting $856 million January–ending quarter, according to FactSet.
While not naming the company, Pure Storage also touted a design contract with a cloud hyperscaler, the term typically applied to tech giants Amazon (AMZN), Microsoft (MSFT), Google (GOOGL) and Meta (META). Pure Storage teased the design contract at an analyst presentation earlier this year. Hyperscalers typically rely on hard disk storage, rather than the flash technology Pure Storage offers.
“Pure Storage has achieved another industry first in our journey of data storage innovation with a transformational design win for our DirectFlash technology in a top-four hyperscaler,” CEO Charles Giancarlo said in a news release. “This win is the vanguard for Pure Flash technology to become the standard for all hyperscaler online storage, providing unparalleled performance and scalability while also reducing operating costs and power consumption.”
On the stock market today, Pure Storage stock rallied more than 25% to 67.24 in after-hours action.
More earnings coverage to come.
Pure Storage Stock Up 53% This Year
Prior to earnings, Pure Storage gained 1% in Tuesday trading. Shares have gained 53% this year but is down about 12% since it last reported earnings in late August. The company lowered its annual guidance for subscription-as-a-service contracts with its Q2 report. Prior to that, Pure Storage stock was gaining momentum as a potential AI play on the increased needs for data storage. It has also been targeting the cloud hyperscaler market.
Coming into the report, Pure Storage stock had an IBD Composite Rating of 70 out of 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.
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