The artificial intelligence infrastructure build-out has created a tremendous need for memory and storage products. Micron Technology and Sandisk have benefited greatly for that demand, both in terms of revenue growth and share price appreciation. But there are other ways investors can play the memory and storage supercycle.
For instance, Everpure (P +1.64%) is a lesser-known company that designs enterprise storage solutions based on its proprietary DirectFlash technology. Its products have now been adopted by two of the five largest hyperscalers. And Everpure, through strong growth and financial stability, recently earned a place in the S&P 500 (^GSPC -0.58%), a benchmark for the U.S. stock market.
Everpure will be added to the S&P 500 before the market opens on Sept. 21. History says this will happen next.
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Everpure will join the S&P 500 on Sept. 21
The S&P 500 tracks 500 large U.S. companies that meet certain eligibility criteria, including GAAP profitability and a minimum market cap of $22.7 billion. In the last decade, 171 companies were added to the index, and the average stock returned 16% over the next year following its inclusion. Stocks tend to rise after joining the S&P 500 because passive funds tracking the index must buy shares.
Everpure will be added to the S&P 500 before the market opens on Monday, Sept. 21. If its performance matches the historical average, the stock will add 16% during the next year. Of course, that forecast is based on a very superficial analysis. Whether Everpure stock moves higher or lower in the next year depends on financial results and market sentiment.
Everpure offers industry-leading storage density
Everpure buys raw NAND flash memory from suppliers like Micron and Sandisk and uses it to build enterprise storage arrays that combine custom hardware and software. Everpure has distinguished itself with DirectFlash modules, which let its Purity software manage flash memory directly rather through flash translation layers (FLT) found in traditional solid-state drives (SSDs).
What does that mean? Competitors generally build flash arrays using off-the-shelf SSDs, each of which is managed by its own FLT that consumes capacity and power. Everpure eliminates those redundancies with its DirectFlash technology, which lets its operating system communicate directly with raw flash rather than through a middleman.
DirectFlash modules improve storage density and reduce power consumption by managing tasks such as wear-leveling, garbage collection, and error correction at the system level rather than the device level. "Our DirectFlash modules deliver two to three times better storage density and consume from 39% to 54% fewer watts per terabyte than our closest competitors today," according to Everpure.
Everpure has also differentiated itself with its Evergreen subscription model. Customers receive continuous software and hardware upgrades in a non-disruptive manner, meaning individual parts (controllers, blades, and flash media) can be replaced in a modular fashion without system downtime. Compared to traditional buy-and-replace products, Everpure's Evergreen storage model is 30% to 40% cheaper.
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Key Data Points
Wall Street says Everpure stock is undervalued
Everpure reported strong financial results in the second quarter. Revenue increased 38% to $1.2 billion, and non-GAAP net income increased 63% to $0.70 per diluted share. CEO Charlie Giancarlo said the company had entered "breakout territory" in its core enterprise market, as the artificial intelligence boom is causing customers to focus more on how they manage data.
Additionally, Everpure secured a second top-five hyperscaler as a customer, expanding on the deal with Meta Platforms it announced in 2024. "Two of the largest infrastructure environments in the world will be utilizing Everpure technology," according to a company press release. Management did not name the new customer, but TD Cowen analyst Krish Sankar believes it's Oracle.
Wall Street expects Everpure's adjusted earnings to increase at 28% annually through the fiscal year ending in January 2028. That makes the current valuation of 43 times adjusted earnings look reasonable. Indeed, among 21 Wall Street analysts, Everpure has a median target price of $133 per share. That implies 31% upside from its current share price of $101. Investors should consider buying a small position today.
