Pure Storage Stock Rises on Strong Q3 Earnings and Hyperscaler Win
Mountain View, Thursday, 5 December 2024.
Pure Storage’s stock surged 22% following Q3 earnings exceeding expectations and a pivotal design win with a top hyperscaler, boosting investor confidence.
Record-Breaking Q3 Performance
Pure Storage (NYSE: PSTG) demonstrated remarkable financial strength in its third quarter ending November 3, 2024, with adjusted earnings of $0.50 per share, significantly surpassing analyst expectations of $0.41 [1][3]. The company reported revenue of $831.1 million, marking a 68.1/763*100}% increase from the previous year and exceeding Wall Street’s target of $815 million [1][3]. Notably, subscription services revenue showed particularly strong growth, increasing 22% year-over-year to reach $376.4 million [3].
Groundbreaking Hyperscaler Partnership
The stock’s dramatic rise was primarily driven by Pure Storage’s announcement of a landmark ‘design win’ with one of the top four hyperscale cloud providers for its DirectFlash technology [1]. CEO Charles Giancarlo emphasized the historic nature of this achievement, noting it represents the first-ever design win to provide flash for standard hyperscaler storage [1]. This breakthrough is particularly significant as the hyperscale market currently accounts for 60-70% of global hard disk drive purchases [1].
Strong Future Outlook
Looking ahead, Pure Storage has raised its fiscal year sales guidance to $3.15 billion, up from its August 2024 estimate of $3 billion [1]. For the fourth quarter, the company projects sales of $867 million, exceeding analyst expectations of $856 million [1][3]. CFO Kevan Krysler highlighted the company’s sustained business model strength, while industry analyst Steve McDowell noted that subscription services now account for approximately 45% of revenue and are growing at over 20% per quarter [3].
Market Impact and Technical Analysis
The stock closed at $65.27 on December 4, 2024, reaching its highest level since July 2024 [1]. This performance marks a significant recovery following a challenging period after the company’s second quarter report in August 2024 [1]. While Pure Storage maintains an IBD Composite Rating of 70 out of 99 [1], analyst Jason Ader from William Blair expressed optimism about the Q3 results and the hyperscaler win with the statement ‘the eagle has landed’ [1].