$PSTG -13% today and -18% since our report while SSD, HDD and similar storage players have mooned. $PSTG is just not much of an AI / hyperscaler / data center buildout beneficiary
Finally, Pure doesn’t deserve the premium SaaS valuation multiple that bulls want to ascribe it. Its “software” revenue largely comes from maintenance, support, and pre-paid hardware upgrades. Another former tech darling now legacy, we see 50%+ downside in $PSTG shares. (10/10)
Despite its perception as a disruptive high-performance pure play, $PSTG is poorly positioned to capitalize on cloud or AI infrastructure spend themes. NetApp is arguably better positioned for each, delivers superior profitability, and trades at half the price. (9/10)
$PSTG may have benefited from the adoption of all-flash arrays, but its AFA market share has been largely stagnant, and the migration of workloads to the cloud makes its core business a melting ice cube. (8/10)
$PSTG’s core enterprise business is vulnerable: big competitors like $DELL, $HPE, and $NTAP have closed the gap on storage-as-a-service offerings, non-disruptive upgrades, and management software while their superior product breadth makes them more strategic to customers. (7/10)
There’s a good reason why VAST is rumored to be raising money from Google and NVIDIA at a $30B valuation (10% higher than Pure’s market cap): they are a true AI enabler. Former $PSTG executives have noted they were surprised by VAST’s outperformance. (6/10)
$PSTG’s supposed architecture advantage has been nullified by the new generation of high-performance data infrastructure players such as DDN, WEKA, VAST Data, and Hammerspace who leverage commodity hardware and can achieve far greater scale. (5/10)
Pure’s deal with Meta has been overhyped. Far from buying Pure’s products, Meta is simply licensing its software for a narrow and replicable capability. $PSTG has failed to win subsequent projects and was guarded on new customer prospects on its recent earnings call. (4/10)
Pure insults investors by suggesting leading hyperscalers such as Google and Amazon would adopt its products if they only looked at total cost of ownership. These companies are arguably the most sophisticated IT buyers on the planet, and they aren’t buying $PSTG’s products (2/10)
We’re short $PSTG. Report available at https://t.co/w1sGp2IVZB. Pure Storage has gone from disruptor to disrupted. We believe its hyperscaler strategy will disappoint, while its core enterprise storage products face declining differentiation (1/10)
