Nvidia’s Midas Touch: 3 Data Storage Stocks Basking in NVDA’s Glow


  • With artificial intelligence booming, the demand for the data needed to power AI systems is surging. Here are three top data storage stocks to buy.
  • Oracle (ORCL): ORCL is becoming a major cloud infrastructure player. 
  • Pure Storage (PSTG): Multiple investment banks were bullish on PSTG in the wake of its strong Q1 results. 
  • Micron (MU): MU is expanding quickly to meet the huge demand for its flash memory products. 
data storage stocks - Nvidia’s Midas Touch: 3 Data Storage Stocks Basking in NVDA’s Glow

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Dell Technologies (NYSE:DELL) COO Jeff Clarke recently said that graphics processing units are artificial intelligence’s brain, while networking is its heart and data storage allows it to breathe. In other words, the proliferation of AI, enabled by Nvidia’s (NASDAQ:NVDA) GPUs, is leading to tremendous demand for data storage software. “I’d argue storage is the lungs pumping the data,” Clarke added.

With a huge number of companies and government agencies starting to utilize AI on a wide scale, the amount of data — or air — that will need to be stored is growing exponentially. Therefore, much more storage — or lungs — will need to be deployed to process the data or air. Indeed, according to research firm MarketandMarkets, the size of the cloud storage market will surge from $99.2 billion in 2023 to $234.9 billion by 2028, representing a compound annual growth rate of 18.8%. For investors who want to exploit this strong trend, here are three top data storage stocks to buy.

Oracle (ORCL)

A photo of an Oracle (ORCL stock) sign outside a building.
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On June 12, Oracle (NASDAQ:ORCL) reported that its database would feature on Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) Google Cloud. Oracle also noted that OpenAI, the owner and operator of the popular ChatGPT chatbot, would use its cloud infrastructure system.

CEO  Safra Catz reported that, in its last two quarters, the firm had made the “largest sales contracts in (its) history.” Those transactions involved “training AI large language models in the Oracle Cloud,” Catz noted. Going forward, the company’s financial results should see a boost from strong demand for its database software and cloud infrastructure products.

Indeed, Oracle expects its top line to climb by at least 10% in its current fiscal year which ends in May 2025, and it expects its growth to accelerate as the year continues.

Despite all of the company’s positive catalysts and its strong guidance. ORCL stock has a relatively low forward price-to-earnings ratio of 20 times.

Pure Storage (PSTG)

The Pure Storage logo at the entrance to its office in Mountain View, California. PSTG stock.
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On May 30, Pure Storage (NYSE:PSTG) reported strong first-quarter results as its revenue jumped 17.7% versus the same period a year earlier to $693.5 million. Moreover, its remaining performance obligations, or backlog, jumped 27% year-over-year to $2.3 billion. The company’s net cash provided by operating activities came in at $221.5 million, up from $173.25 million in Q1 of 2023.

CEO Charles Giancarlo said that the firm “is uniquely positioned to integrate fragmented data storage environments, which hinders enterprises from easily deploying artificial intelligence, hybrid cloud, and modern application deployment,”

Multiple investment banks responded positively to the company’s results. Wedbush raised its price target on the shares to $80 from $70. The bank thinks that the company’s financial results will exceed the Street’s average expectations going forward.

Needham also increased its price target to $80, as the bank believes that the company can gain market share going forward while increasing its operating margins.

Micron (MU)

An outside image of a Micron Technology, Inc. headquarters. MU stock. momentum stocks to buy soon
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Micron (NASDAQ:MU) develops flash memory systems. Swiss bank UBS recently hiked its price target on MU stock to $155 from $125. UBS expects the company to benefit from increased spending on high-bandwidth memory. The bank predicts that the firm’s 2025 earnings per share will come in at about $17.50, up from analysts’ average EPS estimate of 92 cents for this year and well above their mean 2025 EPs estimate of $8.11.

Meanwhile, Citi predicts that the prices of dynamic random access memory chips, one of Micron’s main products, will jump 53% in 2024. The bank identifies MU stock as its top pick in the chip sector.

Also noteworthy is that the company is building a new, $15 billion government-subsidized chip plant in Idaho. The plant should meaningfully boost the company’s financial results over the longer term. And finally, indicating that the company stands well-positioned to grow rapidly among data storage stocks over the medium-to-long term as it is seeking to hire 537 new employees.

On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines

Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been SMCI, INTC, and MGM. You can reach him on Stocktwits at @larryramer.

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