Pure Storage, Inc. (PSTG): A Bull Case Theory

Core Thesis - Pure Storage, Inc. (PSTG) is experiencing investor skepticism regarding future profitability despite a recent earnings update, with a focus on its flash storage solutions for enterprise customers [2] Financial Performance - In fiscal Q3 2026, Pure Storage reported revenue of $964 million, representing a 16% year-over-year increase, and annual recurring revenue rose 17% to $1.84 billion, with a gross margin of 74% [4] - Management anticipates full-year revenue growth of 14% to 15%, with potential acceleration into high teens as hyperscaler deployments increase [5] Market Position and Strategy - Expectations for Pure Storage improved significantly after announcing a partnership with Meta, a major hyperscaler, which positions the company to enhance flash storage adoption in hyperscale data centers [3] - The company is currently in a research and development phase for its hyperscaler strategy, which may impact short-term profitability [3][6] Investment Sentiment - Despite limited GAAP profitability due to stock-based compensation, management has initiated a $400 million share repurchase program, indicating confidence in long-term returns [6] - The stock price has appreciated approximately 53.21% since a previous bullish thesis in March 2025, reflecting the market's reaction to the company's fundamentals [7]