What Happened?
Shares of data storage solutions provider Pure Storage (NYSE: PSTG) jumped 2.5% in the morning session after the stock hit an all-time high following a strong earnings report that prompted several Wall Street analysts to raise their price targets.
The company delivered a "beat and raise" quarter, with revenue of $861 million. The report highlighted significant acceleration, with the product segment growing 11% compared to about 1% in the same period last year. Following the results, multiple analysts adjusted their outlooks. TD Cowen raised its price target to $85, noting that the company is generating revenue from Meta for storage deployments. Raymond James increased its target to $88, and Lake Street Capital Markets lifted its target to $80, citing consecutive quarters of revenue acceleration and improved margins.
After the initial pop the shares cooled down to $80.69, up 1.9% from previous close.
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What Is The Market Telling Us
Pure Storage’s shares are very volatile and have had 23 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 8 days ago when the stock dropped 1.4% on the news that the stock was caught in a broader tech-sector swoon as rising bond yields pressured Wall Street. The market kicked off September on a sour note, with a general slide in stocks and bonds. Yields on 30-year Treasuries neared 5%, which tends to negatively impact technology shares whose valuations are sensitive to interest rates. The pressure was felt across the market, with the S&P 500 losing 1% and all megacap tech stocks falling. Pure Storage's decline appears to be part of this wider market downturn rather than specific company news. Investors also reacted to a federal court ruling that most of President Trump's global tariffs were illegal, raising uncertainty over trade policy and the fiscal impact of potential refunds.
Pure Storage is up 29.1% since the beginning of the year, and at $80.69 per share, has set a new 52-week high. Investors who bought $1,000 worth of Pure Storage’s shares 5 years ago would now be looking at an investment worth $5,592.
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