THNQ Index Q1 Spotlight: Pure Storage Operates in Key AI Subsector | ETF Trends

For the first quarter, in the ROBO Global Artificial Intelligence Index spotlight, we highlight Pure Storage, a key player in the Network and Security Subsector (~17% weighting). As AI deployment accelerates, Pure Storage’s innovative data storage solutions and focus on AI-driven infrastructure position the company as a leader in enabling the seamless integration of artificial intelligence across industries.

We consider this subsector critical in the next phase of AI deployment. Secure, reliable scalable Network and Security companies are becoming a key pillar of our modern technology stack. Other companies in the subsector are Arista Networks, Crowdstrike, and Snowflake, for example.

The index underlies the $177.5 million ROBO Global Artificial Intelligence ETF (THNQ)

Additional key subsectors within THNQ’s underlying index are Semiconductor (~22% weighting), Business Process (~17%), Ecommerce (~10%), Cloud Providers (~9%), Big Data/Analytics (~8%), and Healthcare (~6%).  

Pure Storage Background 

Pure Storage is a leading provider of all-flash data storage solutions. Its products enable enterprises to accelerate applications, reduce complexity, and lower costs through its innovative technology. The company’s business model centers around its flash-optimized storage platforms. These include FlashArray for block storage and FlashBlade for unstructured data, as well as its Evergreen subscription services and Pure as-a-Service offering.

Pure Storage has been expanding its portfolio to support AI and machine learning workloads. Notably these include its AI-Ready Infrastructure (AIRI) solution in partnership with NVIDIA, and offerings like FlashStack for AI and support for NVIDIA DGX BasePOD (pictured below). These are slated to be increasingly larger investment areas for generative AI data preparation, training and inference. 

Pure Storage BasePOD

Source: https://www.purestorage.com/products/integrated-platforms/airi.html  

In Q4 fiscal 2024 (ended February 4, 2024), Pure Storage’s subscription annual recurring revenue reached $1.3 billion, up 26% year-over-year. Meanwhile, remaining performance obligations grew 30% to $2.0 billion. These numbers indicate strong future revenue growth. In fact, the company expects to return to double-digit revenue growth in fiscal 2025, projecting revenue around $3.1 billion.

A Well-Positioned Company

Pure Storage maintains gross margins in the low 70s, demonstrating its ability to deliver high-value solutions. The company has a strong focus on innovation and ability to support data-storage-intensive multimodal AI applications. As a result, Pure Storage is well-positioned to capitalize on the growing demand for high-performance storage solutions as enterprises continue to adopt AI and machine learning technologies. 

Pure Storage - Magic Quadrant

The ROBO Global Artificial Intelligence Index offers a compelling opportunity to gain exposure to the rapidly growing AI industry. It includes companies like Pure Storage that represent key holdings across critical AI-related subsectors.

As the AI revolution enters its next phase, the index recognizes the future of AI extends beyond GPUs and training. It also encompasses a broader ecosystem that includes explainability, observability, reliability, and more. With its strategic composition and inclusion of innovative leaders, THNQ’s index is positioned to capitalize on the transformative potential of AI as it reshapes industries on an unprecedented scale. 

For more news, information, and analysis, visit the Artificial Intelligence Channel.

VettaFi LLC (“VettaFi”) is the index provider for THNQ, for which it receives an index licensing fee. However, THNQ is not issued, sponsored, endorsed or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of THNQ.