Pure Storage recently announced a significant milestone – securing its first-ever design win with one of the top four hyperscalers in the data center industry. While the specific hyperscaler wasn’t named, the list of potential partners includes tech giants Microsoft, Amazon, Meta Platforms, and Google.
The announcement came alongside Pure Storage’s strong third-quarter financial results, where the company exceeded analyst expectations with adjusted earnings of 50 cents per share and revenue of $831 million. This performance topped Wall Street’s projections of 41 cents per share and $815 million in revenue.
CEO Charlie Giancarlo expressed enthusiasm about the hyperscaler partnership during the earnings call, emphasizing its groundbreaking nature as the first design win for flash storage in standard hyperscaler environments. The technology is expected to deliver multiple benefits, including cost-effective data storage, reduced power consumption, and improved space utilization in data centers. Additionally, the solution should lower failure rates and maintenance costs compared to traditional disk storage while doubling
infrastructure longevity.
The company’s artificial intelligence initiatives are also gaining traction, with Pure Storage receiving certification for Nvidia’s DGX SuperPOD architecture, designed for large-scale training environments. The company has also formed a strategic investment partnership with cloud computing provider CoreWeave.
Looking forward, Pure Storage raised its guidance, projecting fourth-quarter revenue of $867 million, surpassing analyst
expectations of $856 million. The company also increased its full-year revenue forecast from $3 billion to $3.15 billion. The stock has shown remarkable performance, rising nearly 82% year-to-date and
approximately 97% compared to last year.
Several investment firms have updated their assessments following the earnings announcement. Wedbush analyst Matt Bryson maintained an outperform rating while raising the price target to $75 from $70, noting that while margins were lighter, the hyperscaler partnership announcement dominated investor attention. Piper Sandler upgraded the stock to overweight from neutral, increasing their price target to $76 from $56, and estimated the hyperscaler opportunity could represent $500 million in revenue by 2026.
Needham raised its price target to $75 from $62, maintaining a buy rating and highlighting management’s expectations for significant revenue contribution in fiscal 2027 when the hyperscaler transitions to double-digit exabyte production deployments. Evercore ISI increased its price target to $75 from $70, keeping an outperform rating while emphasizing the importance of successful execution in scaling the cloud partnership for future revenue growth.
The storage company’s focus on artificial intelligence applications continues to expand, with Giancarlo highlighting their role in providing high-performance storage solutions for both public and private GPU farms in machine learning and training environments. The hyperscaler design win represents Pure Storage’s entry into a new market segment, with the potential for additional hyperscaler partnerships in the future.
This strategic advancement positions Pure Storage to potentially transform how major hyperscale environments handle online storage, marking a significant shift from traditional storage methods to flash-based solutions. The company’s trajectory suggests continued growth in revenue and gross profit as it capitalizes on these new opportunities in the coming years.