Pure Storage (PSTG): The Easy Way to Play AI Growth

One of my favorite business lessons comes from the Gold Rush of the mid 1800’s. And helps explain why Pure Storage (PSTG) is my Stock of the Week. 

Most people went bust during that gold rush chasing a dream not appreciating how the odds were stacked against them. However, the folks who did make out like bandits were all the folks supplying the throng of gold miners:

• Equipment
• Lodging
• Food & Booze
• And female companionship (to put it lightly)

So yes, for every NVIDIA crushing it in this AI gold rush, there will be those firms who invest billions of dollars only to come up bust.  

Yet the one sure fire need for all these AI applications is more data storage. This explains how the earnings per share for PSTG is up 6 fold in just the past two years (and the stock price rising even more). 

Even more impressive is the average 40% earnings beat the last 4 quarters including a 63% beat at the end of October putting everyone on notice that this is one of the true winners of the AI gold rush.  

The Zen Ratings model certainly picks up on the attractiveness of PSTG shares. This is a B rated (Buy) stock overall in the top 8% of all 4,600 stocks analyzed by the model. 

Its greatest strength is the top 4% showing for Financials. Meaning that across 26 different financial metrics it shows impressive operational strength. The kind of strength that points to more earnings beats and share price gains in the future. 

(See full Zen Ratings analysis for PSTG here >)

Wall Street analysts are not shy about singing the praises of this stock either. This includes a trifecta of $75 price targets from 3 of the most respected tech analysts:

Mike Cikos, Needham (Top 2% of all analysts)

Amit Daryanani, Evercore (Top 3% of all analysts)

Asiya Merchant, Citgroup (Top 17 of all analysts)

I know a target of $75 doesn't sound that impressive as that is only 20% above the current price. Now imagine that they keep up their beat and raise earnings tradition. 

Those higher earnings will beget a much higher share price. And why I think PSTG will be touching $100 by the end of 2025 and a likely doubling of shares as we flip the calendar to 2026. 

What To Do Next?

Pure Storage (PSTG) is just one of the timely stocks found in my Zen Investor portfolio.

We are harnessing the power of the Zen Ratings model as well as top Wall Street analyst recommendations to find more stocks with 100%+ upside potential. 

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p.s. The next 2 recommendations for Zen Investor will be unveiled on January 8th. 

Wishing you a world of investment success!

Steve Reitmeister…but everyone calls me Reity (pronounced “Righty”)

Editor of the Zen Investor

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