UBS says this cloud storage play may rally by 40%

Pure Storage CEO Scott Dietzen.
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The sell-off in shares of Pure Storage this year may be overdone, UBS told clients Thursday, predicting 40 percent upside for shares of the cloud computing play on a potential acquisition and a number of other positive catalysts. The bank upgraded the stock to buy from neutral.

"Pure has a couple of years of runway but might not remain independent," UBS analyst Steven Milunovich wrote. "We view flash as sustaining technology for storage array vendors and disruptive to hard disk drive vendors."

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