Snowflake stock surges over 20% after strong Q2 earnings and positive guidance for next quarter

SNOW stock today: Snowflake’s stock surged more than 20% after it crushed Wall Street earnings expectations for its fiscal second quarter and offered strong guidance for the next, as per a report. This comes as businesses are doubling down on modernizing their company data for artificial intelligence projects, as per an IBD report.

Snowflake’s Strong Q2 Results: Revenue and Profit Beat Estimates

The cloud-based data storage company reported adjusted earnings of 35 cents per share, nearly double what it made a year ago, and well ahead of the 27 cents analysts were expecting, as reported by IBD. Revenue hit $1.1 billion, up 32% year over year and also slightly above forecasts of $1.09 billion, according to the report.

CEO Sridhar Ramaswamy shared that over 6,100 accounts are using Snowflake's AI every week, and that the company has "an enormous opportunity ahead as we continue to empower every enterprise to achieve its full potential through data and AI," as quoted by Investopedia.


William Blair analyst Jason Ader said that "The upbeat print reinforces the bull thesis around the technical moat of Snowflake's data platform — serving both structured and unstructured data — with new products becoming an increasingly material growth lever and driving healthy new customer acquisition," as quoted in the report.

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Snowflake’s Strong Guidance for Q3 Excites Investors

Investors were even more encouraged as the company’s outlook for the current quarter was above analyst expectation. Snowflake projected product revenue between $1.125 billion and $1.130 billion, topping Wall Street’s expectations of $1.12 billion, as per IBD.

RBC Capital analyst Matthew Hedberg pointed out that Snowflake's strong quarter with product revenue of $1.091.5 billion, represents a beat of 4.9%, versus the 3.6% beat last quarter, as reported by IBD.

While Citi analyst Tyler Radke highlighted that, "Snowflake exceeded high expectations delivering its strongest beat in years with reaccelerating product revenue growth to 32%," adding, "With two strong quarters, we see positive read-throughs across consumption patterns and believe the strength and migration activity suggests large enterprises' increasing budget allocation towards database modernization as part of artificial intelligence projects which likely supports further upside," as quoted by IBD.

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Snowflake Positioned to Support AI Agent Deployment

The strong earings results comes as many companies are in trials with autonomous, goal-driven AI agents and Snowflake is focused on helping companies use proprietary data to deploy their own AI agents, as per the report.

Snowflake is company that sells data analytics software and runs on cloud-computing platforms, the firm has evolved into a cloud data-management software provider and privately held Databricks has been Snowflake's biggest rival, according to the IBD report.

FAQs

Why did Snowflake's stock go up?
Because the company beat both earnings and revenue expectations and issued stronger-than-expected guidance for the next quarter, as per the IBD report.

What was Snowflake’s revenue for Q2?
Revenue hit $1.1 billion, up 32% year over year and slightly above estimates, as per the IBD report.