To harness the full potential of AI, businesses must manage their data efficiently—a trend fueling the expansion of data storage providers. Today, I will analyze three leading companies in this space and share insights on what to anticipate from Salesforce’s upcoming earnings on Wednesday.
Pure Storage
I have owned a small position in PSTG for about 2 years now. It has been a rocky ride, but my total return is 112%. The company is on the chopping block, and I will likely sell it in the next two weeks. However, this is not a general selling recommendation. It has more to do with how I want to weigh different sectors in my portfolio. PSTG is firing on all cylinders, and the runway for growth seems long.
PSTG delivered standout Q2 2025 earnings, posting a 13% year-over-year (YOY) revenue jump to $861 million, topping Wall Street estimates and raising its full-year outlook. To update my readers, PSTG offers a simple valuation proposition. By transitioning to PSTG’s advanced flash memory technology, customers achieve not only faster and more dependable data access but also cut their energy consumption by 80% compared to legacy hard disk systems. This dramatic improvement in efficiency and sustainability has enabled PSTG to secure major contracts, including a $390 million agreement with Meta, highlighting the broad appeal of its competitive product lineup.
The stock is currently not trading at a discount, so a more favorable entry point may emerge later. For prospective buyers, patience is key—a consolidation phase could create a better buying opportunity. A level near $72 stands out as an attractive zone, as it reflects the price range where PSTG traded before Liberation Day in early April. Waiting for the stock to settle closer to that mark could offer a compelling value for long-term investors.
Snowflake
The first quarter represented a turnaround for SNOW. Second-quarter results were a strong follow-up. SNOW raised its product revenue by 32% YoY. The company’s net revenue retention rate remained robust at 125%, showcasing strong customer loyalty and account expansion. SNOW added 533 new customers during the quarter, bringing its total customer base to over 12,000, including 654 accounts generating more than $1 million in annual revenue—a 28% increase YoY. Profitability improved, with non-GAAP operating margin rising to 11.1%, up 6.1% from the previous year.
Again, to update my readers, SNOW is a data lake storage provider. Its architecture breaks down data silos, enabling organizations to securely and efficiently share data across departments and with external partners, driving collaboration and faster insights. Thus, SNOW is a natural selection for enterprises that want to pursue AI-driven analytics and data-driven decision-making.
When I put SNOW into a discounted cash flow model, the share price doesn’t come out as undervalued. However, from a peer-valuation perspective, it is important to note that Databricks has an even higher valuation in the private market. This could signal that SNOW could go even higher in the near future. Nevertheless, shareholders need continued execution at this level to be happy. SNOW is up more than 50% this year. Any weakness, and the share price could tumble; investors in this name should therefore be prepared for a high degree of volatility.
NetApp
My earlier misgivings about this company concerned itself with valuation. When we disregard this opinion, there isn’t much that separates NTAP from PSTG. They offer the same type of products and have the same business model. However, NTAP’s poor stock market performance compared to PSTG as of late isn’t only down to valuation, but also has something to do with execution.
In the last quarter, revenues barely grew, standing in sharp contrast to PSTG’s double-digit growth. NTAP’s share price has declined by 5% over the past 52 weeks, which makes its valuation more attractive; however, despite this drop, I still consider the stock somewhat overvalued. The topline growth must rise considerably for me to vouch for the company.
Salesforce
The stock has struggled so far this year, with many investors concerned that AI could disrupt the software industry. I won’t dive into that debate here. However, from a data storage perspective, CRM is quite interesting. Over the past few quarters, CRM has experienced rapid adoption of its data cloud, growing at an annual rate of 20%. Customers need to organize their data effectively to leverage CRM’s agentic layer built alongside all the other software solutions. This growing demand for data management should be a meaningful factor, don’t you think?
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