While chip stocks have slowed down in recent months, companies continue to invest billions in AI initiatives. That’s seen with a demand in new power sources, plans to build out data centers, and other hardware necessary to operate today’s AI programs.
With focus moving away from the chipmakers, companies that offer other parts of the hardware ecosystem can still see growth in the years ahead. Particularly if they’re making breakthroughs that can further benefit the AI rollout.
One such computer hardware play is in data storage. AI will create significantly more data than we use today, and much of that will need to be stored. That’s why companies like Pure Storage (PSTG) are soaring.
Plus, Pure Storage is a leading player in the hyperscaler space, which makes it an even more attractive growth play now. Pure Storage has grown revenues 11% over the past year, although growth has been lackluster, but looking forward, the company sees big growth ahead.
Action to take: Growth and momentum investors may like shares here, as Pure Storage is hardly a value at 167 times earnings. Given their current growth and positioning in hyperscale technology, however, Pure Storage could continue to reward investors beyond the market’s average returns in the years ahead.
For traders, the March 2025 $75 calls, last trading for about $3.20, could see mid-double-digit returns from further gains in Pure Storage shares in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.