Category Archives: oud

Pure Storage Continues Path To Disrupt IBM, EMC, NetApp In Storage

Pure Storage ( PSTG ) received an upbeat review ahead of its first-quarter earnings report next week, with an analyst saying the flash storage market appears to be growing faster than expected. Pacific Crest Securities analyst Brent Bracelin said Pure Storage appears to be gaining market share at the expense of legacy storage vendors including IBM ( IBM ), NetApp ( NTAP ) and EMC, which Dell is acquiring. “Reseller and partner feedback during March and April suggests demand for flash remains strong, particularly for Pure Storage,” Bracelin wrote in a research note. Pure Storage makes storage products based on flash chips, designed for the business enterprise market. Flash-based storage arrays are much faster than disk-drive storage systems but generally come at a higher price. Flash is seen as the future of storage, with that transition well underway but still in the early stages. The vast majority of the storage spend is still with the largest incumbents, including NetApp, IBM and EMC. Pure Storage is growing fast, but it’s still incurring large losses. Pure Storage continues to invest heavily to support a business model that is on pace to quickly scale to a $1 billion run-rate within five years after shipping its first product, Bracelin wrote. The company has $604 million in cash and no debt, and it remains on track to reach positive cash flow by the end of 2018, he said. “We estimate Pure’s revenue could grow by 60%-plus this year, driven by flash share gains,” Bracelin wrote. Pure Storage is set to report earnings after the market close Wednesday, for its fiscal Q1 ended April 30. The Wall Street consensus estimate on revenue is $138 million, up 86% year over year. The bottom-line consensus, as polled by Thomson Reuters, is for a per-share loss minus items of 23 cents, vs. a 26-cent loss in the year-earlier quarter. Pacific Crest continues to rate Pure Storage stock overweight, or buy, “based on the promising potential to build a next-generation storage franchise, strong balance sheet with over $600 million in cash, and the longer-term profit potential,” Bracelin wrote. Bracelin has a price target on Pure Storage stock of 24. The company came public in October 2015, raising $425 million with an initial public offering that priced 25 million shares at 17. Pure Storage stock was near 14.50, up 1%, in afternoon trading in the stock market today .

Apple iPhone, Samsung Galaxy OLED Swap May Juice Applied Materials

Stout competition to take a chunk of Apple ‘s ( AAPL ) iPhone and Samsung’s Galaxy business drove Applied Materials ‘ ( AMAT ) Q2 display orders to grow nearly sixfold, and Applied Materials CFO Robert Halliday doesn’t see that slowing this year. On a year-over-year basis, display orders soared a whopping 483% to $700 million, accounting for 20% of Applied Materials’ record-busting $3.45 billion in Q2 orders. For the year, mobile will push more than 70% of those display orders, Halliday predicts. “The great majority of that is focused on the OLED market this year in terms of the order rate,” he said late Thursday on Applied Material’s fiscal Q2 earnings conference call with analysts. “It’s not a one-quarter event, and we see the concentration in mobile.” In afternoon trading on the stock market today , Applied Materials stock rocketed more than 13%, near 22.50, touching a 14-month high. Chip-gear rivals Lam Research ( LRCX ) and KLA-Tencor ( KLAC ) stocks jumped 4.5% and 2.5%, respectively.  ASML ( ASML ), the No. 1 maker of chip manufacturing gear by market cap, was up 2%. Applied Materials’ equipment enables chip manufacturers such as Taiwan Semiconductor Manufacturing ( TSM ) and Intel ( INTC ) to produce chips. Last year, Applied Materials unveiled two systems that enable high-volume production of OLED displays. OLEDs, organic light-emitting diodes, are used to create thin, flexible displays and lighting panels for TVs and mobile. Apple is reportedly switching to OLED iPhone displays and might have tapped Samsung to make them, according to AppleInsider.com. The OLED opportunity is huge, Applied Materials CEO Gary Dickerson said on the call. “New display technology, such as OLED, are enabled by materials innovation,” he said. “This is creating significant new market opportunities for Applied.” At least four investment banks boosted their price targets Friday on Applied Materials stock, with Needham and Credit Suisse analysts noting Applied Materials’ huge opportunity in China, where the company has a 30-year-plus relationship. During Q2 ended May 1, Applied Materials reported $1.97 billion in silicon orders, up 15% year over year. Nand (flash memory) accounted for 49% of those orders, as companies like Micron ( MU ) and Intel ramp their 3D Nand technology. “The almost $1 billion in Nand bookings confirmed Applied Materials’ strong positions around 3D Nand with multiple products,” Needham analyst Y. Edwin Mok wrote in a research report, as he boosted his price target on Applied Materials stock to 26 from 22. Mok rates the stock a buy. Chinese orders hit $903 million, accounting for 26% of the total, as memory customers transition to solid-disc drives (SSD) from hard-disc drives (HDD), Credit Suisse analyst Farhan Ahmad said Friday. Dickerson noted Thursday that the company has doubled its sales in China over the last two years. Chinese customers are talking about spending $20 billion to $30 billion over the next four to five years, Halliday added. Ahmad boosted his price target on Applied Materials stock to 25 from 23 and kept his outperform rating.