On 10 August, Everpure — the Mountain View maker of all-flash storage arrays that traded as Pure Storage until a February rebrand — said a second top-five hyperscaler had chosen its DirectFlash drives under a new design win and supply agreement. It named no customer and disclosed no financial terms, and said the deal is expected to contribute revenue only from fiscal 2028. Susquehanna and Morgan Stanley upgraded the stock the same day, at targets of $120 and $108. Within four sessions the shares had passed both.

What a shipped hyperscaler deal looks like is already on the record. Everpure's first, a March agreement to become Meta Platforms' primary storage provider, began recognizing revenue at roughly $30m in a quarter at gross margins above 90%. Management has said hyperscale product revenue was minimal last quarter as planned, that the significant majority arrives in the second half of fiscal 2027, and that the category should carry 75-85% gross margins. The August move discounted a logo, not a shipment.

The business under the logo

Everpure's operating numbers are the strongest in enterprise storage. Fiscal first-quarter revenue reached $1.053bn, up 35% year over year, with product revenue up 55%. Annual recurring revenue from its Evergreen//One consumption subscriptions passed $2bn, and remaining performance obligations — contracted work not yet billed — grew 41% to $3.8bn.

The costs are equally visible. GAAP operating margin was 1.89%, on $19.9m of operating income against more than a billion dollars of revenue. Product gross margin of 65.5% was up year over year but down 180 basis points sequentially. And the diluted share count rose 5.2% in twelve months, to 343.5m, as stock-based compensation quietly claims part of whatever the hyperscalers eventually pay.

NetApp is the opposite case

NetApp, the San Jose vendor whose ONTAP software runs the arrays it sells to banks, hospitals and governments, has the record Everpure lacks. Revenue growth accelerated through every quarter of fiscal 2026, from 1.2% to 12.5%. Operating margin widened from 19.8% to 27.3%. All-flash array revenue hit a record $1.2bn in the fourth quarter and $4.2bn for the year. Free cash flow rose 40% to $1.869bn, and the share count has fallen 6.1% in eight quarters.

What NetApp will not do is put a dollar figure on artificial intelligence. It reports roughly 500 AI and data-preparation wins in the quarter and more than 1,100 for the year — a count, never a revenue line.

The flash bill is arriving

Both companies buy the same inflating input. Contract prices for NAND flash memory are forecast to rise a further 10-15% quarter over quarter as suppliers reallocate capacity to enterprise solid-state drives for Nvidia's next server platform. NetApp has already conceded the arithmetic, guiding fiscal 2027 gross margin to 68.5-69.5% from 70.74% delivered, naming NAND and DRAM, with product margin bottoming in the fiscal fourth quarter.

That blended margin is not earned on the box. NetApp's fourth-quarter product gross margin was 56.1%, against 93% on support contracts and 85.7% on public-cloud services. The software attach carries the company; the hardware is increasingly a pass-through of someone else's price increase.

What the price already assumes

NetApp now costs 7.70x its trailing gross profit, against roughly 5.9x in late May and 4.4x in February. Trailing gross profit grew 5.1% across that stretch. Put differently, about 94% of the increase in market value is re-rating rather than earned profit. Everpure's expansion has been milder — near 10.1x in February to about 13.1x today — against trailing gross profit that grew 13.7%, nearly three times NetApp's rate.

NetApp's shares have held an uptrend since 21 May, the 50-day average above the 200-day for 92 straight days, and the name appears nowhere in the market's 90-day leaderboards. But 22.4 percentage points of its 38% three-month gain came in a single session, 29 May, the day after earnings, on 15.9m shares against a 3m norm. Strip that day and the advance is about 12.8%. Everpure, by contrast, has whipsawed all year and has traded without trend since late July. Both peaked on 14 August and both fell exactly 7.2% into 21 August, after a Wall Street Journal analysis of roughly $3trn in off-balance-sheet AI commitments knocked the memory complex down; Dell fell 12.0% and Hewlett Packard Enterprise 11.3% over the same stretch.

Everpure reports on 26 August. NetApp reports on 2 September. One of them has to show the hyperscaler revenue actually landing; the other has to show what NAND does to the box.

The setup

Where it stands — Everpure's price embeds a design win that ships in fiscal 2028; NetApp's embeds a multiple that rose 75% on 5% gross-profit growth. Would confirm — Everpure booking material second-half hyperscaler product revenue at the promised 75-85% gross margin. Would invalidate — NetApp cutting its 68.5-69.5% fiscal 2027 gross-margin guide again on flash costs, or Everpure's product margin falling below 65%. Watch next — Everpure's fiscal Q2 report on 26 August and analyst meeting on 23 September; NetApp's fiscal Q1 on 2 September. Valuation — NetApp at 7.70x trailing and 7.08x forward gross profit, versus 4.4x in February; Everpure near 13.1x trailing, from 10.1x.