What Happened?
Shares of data storage solutions provider Pure Storage (NYSE:PSTG) jumped 28.7% in the morning session after the company reported strong second-quarter financial results that beat Wall Street expectations and raised its full-year outlook.
The data storage provider announced quarterly revenue of $861 million, an increase of 12.7% year-over-year, surpassing analysts' estimates of $846.3 million. The company's non-GAAP profit of $0.43 per share also beat the consensus forecast of $0.39. Fueling investor optimism, Pure Storage provided strong guidance for the future. The company's forecast for third-quarter revenue was $955 million at the midpoint, exceeding analysts' expectations. Furthermore, it lifted its full-year revenue guidance to $3.62 billion at the midpoint, a notable increase from the previous $3.52 billion.
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What Is The Market Telling Us
Pure Storage’s shares are very volatile and have had 24 moves greater than 5% over the last year. But moves this big are rare even for Pure Storage and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 6 days ago when the stock gained 3.9% on the news that the major indices rebounded, as Fed Chair Jerome Powell delivered dovish remarks at the much-awaited Jackson Hole symposium. Powell suggested that with inflation risks moderating and unemployment remaining low, the Federal Reserve might consider a shift in its monetary policy stance, including potential interest rate cuts. This outlook eased market concerns about prolonged high interest rates and their impact on economic growth. The prospect of lower borrowing costs bolstered investor confidence, particularly in sectors that have lagged, leading to a broad rally across the market.
Pure Storage is up 28.7% since the beginning of the year, and at $80.43 per share, has set a new 52-week high. Investors who bought $1,000 worth of Pure Storage’s shares 5 years ago would now be looking at an investment worth $5,316.
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