For storing state file of my pulumi stack I am using s3 bucket. Should I use single s3 bucket for all stacks/env? or should I create 3 different buckets for state file of 3 different stacks? Which is better/preferred?  Our aim it to keep state file of different env as isolated as possible. Please suggest.

Either will work, and I've seen users who prefer each path. Even if you share a bucket, environments will be separated by the root path in the bucket you choose to use for each stack.

Thanks @white-balloon-205, We have decided to go with different bucket for different stack/env.