snowflake (snow) reported second-quarter earnings on Wednesday that beat analysts’ expectations and showed revenue growth of 36%. SNOW stock rose 3% in aftermarket trading.
X
For the second fiscal quarter ended in July, the cloud data platform provider reported adjusted earnings of 22 cents per share on revenue of $674 million. Revenue saw a 36% increase over sales for the same period last year, which amounted to $497 million.
SNOW stock analysts polled by FactSet expected earnings of 10 cents per share on annual sales increasing 33% to $662 million.
Also, Snowflake officials reiterated their sales forecast for the rest of the company’s fiscal year 2024, which ends in January. The company expects sales of $2.6 billion for the year, which represents growth of 34% year over year. But that forecast is lower than the $2.76 billion expected from analysts FactSet polled ahead of Wednesday’s earnings.
SNOW shares took a hit in May when the company cut its prior-year forecast for first-quarter earnings. The company forecast sales growth of 44% to 45%.
Shares of Snowflake rose 4.2% to 162.30 in recent after-market trading today.
Potential artificial intelligence enhancement?
Snowflake announced its quarterly results as most eyes in the investor world were turned to the chipmaker and artificial intelligence pioneer’s earnings report. nvidia (NVDA). Company officials said Snowflake can also benefit from the AI boom.
“As the global center for trusted enterprise data, Snowflake is well-positioned to enable the growing interest in AI/(Machine Learning),” Frank Slotman, Chairman and CEO of Snowflake, said in a written statement. “Businesses and organizations alike are increasingly realizing that they cannot have an AI strategy without a data strategy.”
Snowflake announced in June that it had partnered with Nvidia to allow companies to build custom large language models using their data in the Snowflake Data Cloud.
Snow inventory: the search for snowmelt in cloud computing
Large companies have spent the past few quarters looking for ways to reduce — or improve — spending on cloud services. But there were signs of improvement in marketing that led to Snowflake’s earnings on Wednesday.
and what is worth to mention, Amazon (weigh up) earlier this month reported second-quarter sales growth for Amazon Web Services’ cloud computing unit that beat analyst expectations. SNOW stock rose 3.5% in trading the day after Amazon’s earnings report, on August 4.
Snowflake product revenue — which represents customers who use the company’s software to store or analyze data — rose 37% year-over-year to $642 million in the quarter.
SNOW stock ended the regular trading session up 2% at $155.70 in today’s stock market. Overall, SNOW stock is up 8% since the beginning of the year, when its earnings report was released. But shares are down 12.5% this quarter.
Furthermore, Snowflake stock carries an IBD Composite Poor rating of 56 out of 99, according to IBD stock check. The company’s stock ranks 59th out of 127 companies in the enterprise software group.
You may also like:
Learn how to time the market with IBD’s ETF Market Strategy
IBM is selling weather assets in a plan to focus on the cloud and artificial intelligence
Find the best growth stocks to watch today with the IBD 50
Video stocks increase profits, then lose the gains
