Amidst the digital explosion propelled by technologies like Artificial Intelligence (AI), data storage companies stand at the forefront of a lucrative opportunity. Data Center Dynamics highlights the indispensable reliance of AI on physical data storage, envisioning a soaring demand for cloud data storage and hard drives. As AI’s hunger for data grows, firms specializing in data storage are poised for significant growth in the foreseeable future. Here are three storage stocks primed to capitalize on the data surge.
Pure Storage (PSTG)
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The data storage provider, Pure Storage (NASDAQ:PSTG), anticipates a robust 15% year-over-year (YOY) surge in its top line, reaching $680 million. Surpassing analysts’ predictions, Pure Storage’s Q1 revenue is expected to hit $670 million.
Investment bank William Blair commends Pure Storage for delivering positive results, projecting a promising double-digit revenue growth trajectory and slight margin expansion.
Citi enters the fray by initiating coverage on PSTG with a “Buy” rating and a $65 price target, citing the company’s flash memory business as a key growth driver amid the AI and machine learning proliferation.
Micron (MU)
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Micron (NASDAQ:MU) specializes in flash memory products. Citi foresees a stellar fiscal Q2 performance for the company, propelled by high product demand and pricing. Notably, some of Micron’s premium products are complementary to Nvidia’s (NASDAQ:NVDA) chips, capitalizing on the current robust chip demand. Citi also earmarks a $150 price target for MU stock, accentuating its link to the AI upsurge.
Furthermore, Micron is expected to receive governmental subsidies for its factories, as elucidated by The Wall Street Journal.
Data Storage (DTST)
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Data Storage (NASDAQ:DTST) offers data vaulting services critical for business continuity and disaster recovery strategy. With data isolation in primary backup and production environments, DTST ensures secure cloud or physical storage solutions along with cybersecurity products in its arsenal.
In Q3, DTST witnessed a remarkable 35% YOY revenue escalation to $6 million, coupled with an improved operating income from a previous loss. The company’s robust operating activities generated substantial net cash flow in the first nine months of the previous year.
Notably, Investor’s Business Daily lauds DTST with stellar ratings, denoting strong institutional investor interest in the company. With a Composite Rating of 98 out of 99 and an Accumulation/Distribution rating of A, Data Storage is undoubtedly attracting significant attention from investors.
On a final note, it is worth mentioning that the views expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
