Pure Storage (PSTG) shares closed more than 30% higher on Thursday after the enterprise-grade data storage solutions company reported an impressive Q2 and raised its guidance for the full year.
The company’s management now expects revenue to fall between $3.6 billion and $3.63 billion in fiscal 2025 – well ahead of $3.52 billion it had forecast earlier.
Including the post-earnings surge, Pure Storage stock is trading at more than double its price in the first week of April.
PSTG stock is now going for an overly stretched forward price-earnings (P/E) multiple of 107x.
However, valuation may still not be a major concern for Pure Storage given “this market is addicted to easy money,” said Dan Niles, a renowned portfolio manager in a CNBC interview today.
In the current environment, he added, “you’re paid to take risks.”
On Thursday, Fundstrat’s top strategist Tom Lee also revealed the momentum trade isn’t showing any signs of fading, at least anytime soon.
His remarks further substantiate that investors shouldn’t be overly concerned about Pure Storage’s valuation, especially after the company recorded a blockbuster quarter and raised its guidance for the future.
Pure Storage shares remain attractive also because they offer a means of “playing into the artificial intelligence environment in multiple ways,” according to the company’s chief executive Charles Giancarlo.
In a post-earnings interview, Giancarlo said an AI environment is all about “performance,” touting his company’s “FlashBlade Exa,” whose industry-leading benchmarks continue to attract massive demand.
PSTG is the primary storage supplier for Meta Platforms (META). On Thursday, the NYSE-listed firm said it’s on track to deploy as much as 2 exabyte of capacity with the tech titan by year-end.
That made UBS analysts increase their price objective on PSTG shares today to $85, indicating potential for another 6% upside from here.
Wall Street currently has a consensus “Moderate Buy” rating on Pure Storage shares.
