Snowflake (SNOW) reported second-quarter earnings Wednesday that trounced analyst expectations and showed 36% revenue growth. SNOW stock was up 3% in aftermarket trades.
For its fiscal second quarter ending in July, the cloud-data platform provider reported adjusted earnings of 22 cents per share on revenue of $674 million. The revenue marked a 36% increase from the $497 million in sales for the same period last year.
SNOW stock analysts polled by FactSet expected earnings of 10 cents per share on a 33% yearly sales rise, to $662 million.
Also, Snowflake officials reiterated their sales outlook for the rest of the company’s fiscal 2024, ending in January. The firm expects $2.6 billion in sales for the year, representing 34% year-over-year growth. But that outlook is short of the $2.76 billion expected from analysts polled by FactSet ahead of Wednesday’s earnings.
SNOW shares took a hit in May when the company lowered its outlook for the year prior to first-quarter earnings. The company predicted 44% to 45% sales growth.
Snowflake shares climbed 4.2% to 162.30 in recent aftermarket trades on the stock market today.
Potential AI Boost?
Snowflake reported its quarterly results as most eyes in the investor world were trained on the earnings report of chipmaker and artificial intelligence leader Nvidia (NVDA). Company officials said Snowflake also can benefit from the AI boom.
“Snowflake as the global epicenter of trusted enterprise data is well positioned to enable the growing interest in AI/[machine learning],” Snowflake Chairman and Chief Executive Frank Slootman said in written remarks. “Enterprises and institutions alike are increasingly aware they cannot have an AI strategy without a data strategy.”
Snowflake announced in June that it was partnering with Nvidia to allow businesses to build custom large language models using their data in the Snowflake Data Cloud.
SNOW Stock: Looking For Thaw In Cloud-Computing
Large companies have spent the past several quarters looking for ways to reduce — or optimize — spending on cloud services. But there were signs of improvement for the marketing leading up to Wednesday’s earnings for Snowflake.
Notably, Amazon (AMZN) earlier this month reported second-quarter sales growth for its Amazon Web Services cloud-computing unit that topped analyst expectations. SNOW stock climbed 3.5% in trading the day after Amazon’s earnings report, on Aug. 4.
Product revenue for Snowflake — which accounts for customers using the company’s software to store or analyze data — increased 37% year over year to $642 million on the quarter.
SNOW stock ended the regular trading session 2% higher at $155.70 on the stock market today. Overall, SNOW stock is up 8% from the start of the year, coming into its earnings report. But shares have fallen 12.5% this quarter.
Further, Snowflake stock holds a weak IBD Composite Rating of 56 out of a best-possible 99, according to IBD Stock Checkup. The company’s shares rank 59th out of 127 companies in the Computer Software-Enterprise group.
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