We recently published a list of 11 Best Data Storage Stocks to Invest in According to Analysts. In this article, we are going to take a look at where Pure Storage, Inc. (NYSE:PSTG) stands against other best data storage stocks to invest in according to analysts.
Data storage is defined as the organized preservation of digital information, which is vital for today’s computing and businesses. It ensures that data, which includes text, images, and videos, remains accessible and secure for future use. This involves storage systems that range from direct attached storage to cloud solutions. Each of these offers different levels of scalability and accessibility. Fortune Business Insights reported that the global data storage market was valued at $218.33 billion in 2024. It’s projected to reach $774.00 billion by 2032 at a 17.2% CAGR. This growth is expected to be driven by the increasing need for data storage solutions due to the rise of big data.
The data storage industry is undergoing a transformation that is primarily driven by the explosive growth of AI workloads. As the global data volume surges towards a projected 181 zettabytes by 2025, AI demands high levels of storage capacity and performance, according to Avnet Integrated Solutions. AI applications are generating and processing massive datasets. The median size of AI training datasets has seen exponential growth with immense storage requirements. This is fueled by AI-generated content and real-time analytics, both demanding rapid data access and processing.
This surge in data necessitates high-performance storage solutions, which pushes the industry towards SSD dominance. The speed and efficiency of SSDs make them ideal for AI’s demanding requirements. Key advancements in SSD technology, such as 3D NAND and QLC NAND, are driving increased storage densities and improved performance. Emerging standards like EDSFF E3 and PCIe Gen 6 are optimizing SSDs for AI server and data center applications, with a focus on performance, efficiency, and the growing field of Edge AI. While SSDs are gaining prominence for active AI processing, HDDs remain relevant for cost-effective, large-scale storage of archived data. Their cost per gigabyte makes them suitable for data archiving, backup, data lakes, and surveillance applications. Technological advancements like HAMR and MAMR are increasing HDD capacities.
SSD prices are expected to decline as production scales and technology improves, while HDD pricing faces potential plateaus due to the maturity of the technology and increased manufacturing costs. The rise of AI is undeniably accelerating the transition towards SSD-dominated storage solutions. While HDDs retain their value for specific applications, SSDs’ performance and efficiency make them the preferred choice for handling AI’s immense data demands. The data storage industry must adapt to this evolving landscape and prioritize high-performance storage solutions to support the ever-growing needs of AI applications.
Our Methodology
We sifted through ETFs and financial media reports to compile a list of the top data storage stocks. We then selected the 11 stocks with high analysts’ upside potential, at least 15%, as of March 28 and that were also the most popular among elite hedge funds. The stocks are ranked in ascending order of their upside potential. We have also added the hedge fund sentiment for each stock, as of Q4 2024, which was sourced from Insider Monkey’s database.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A closeup of a computer monitor displaying a complex software interface used in data protection services.
Pure Storage Inc. (NYSE:PSTG)
Average Upside Potential as of March 28: 63.40%
Number of Hedge Fund Holders: 30
Pure Storage Inc. (NYSE:PSTG) delivers data storage and management solutions. It features all-flash arrays and cloud-native services. Its portfolio, which is driven by the Purity software platform, offers high-performance storage for diverse workloads. These include structured and unstructured data. It facilitates seamless data mobility across hybrid cloud environments.
The company’s data storage platform is driven by its DirectFlash technology which enables a top-four hyperscaler to deploy a consistent architecture. Its 150 terabyte DirectFlash Modules (DFM), with plans for 300 terabyte DFMs, offer significant capacity increases. The E family and FlashArray C are displacing traditional hard disk drives and offer better economics and efficiency. Record sales were achieved by Flashblade, FlashArray XL, and the E family in FQ4 2025.
The company’s Pure Fusion v.2 transforms storage architectures into enterprise data clouds, which automates data management and enhances security. Portworx, its containerized application storage solution, saw growth, especially in AI and cloud-native environments. FY25 revenue reached $3.2 billion, which was up 12%. The company acquired 334 new customers in FQ4. For FY26, Pure Storage Inc. (NYSE:PSTG) expects a revenue of $3.5 billion, which will be an 11% improvement.
Artisan Mid Cap Fund is bullish on the company due to its innovative storage solutions, market share gains, and a major contract win that signals future growth potential. The fund stated the following regarding Pure Storage Inc. (NYSE:PSTG) in its Q4 2024 investor letter:
“During the quarter, we initiated new GardenSM positions in US Foods, Pure Storage, Inc. (NYSE:PSTG) and Robinhood. Pure Storage is redefining enterprise data storage by bypassing traditional approaches used by competitors. Instead of purchasing costly enterprise-grade solid-state drives (SSDs) and layering software ontop, Pure Storage sources raw NAND flash memory and designs custom all-flash storage systems, providing a cost advantage. The company has been gaining share of the core enterprise data storage market due to this offering, but we believe its recent announcement of securing a large hyper scaler data center contract potentially opens the company up to a much larger addressable market and gives us confidence that the company can accelerate its growth trajectory over the next two to three years.”
Overall, PSTG ranks 4th on our list of best data storage stocks to invest in according to analysts. While we acknowledge the growth potential of PSTG, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PSTG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.