Key Takeaways
- Snowflake crushed Q2 expectations with earnings of 62 cents per share versus 45 cents forecast and revenue of $1.55B against $1.48B consensus
- Shares rocketed 22% in after-hours trading and climbed above 23% to $376 in pre-market sessions
- CNBC’s Jim Cramer highlighted SNOW as poised for a significant rally after the quarterly report
- The company’s AI coding assistant CoCo expanded to 9,100 accounts, adding more than 2,000 users in the quarter
- Investor Michael Burry countered the optimism, warning Snowflake is significantly overpriced and faces cybersecurity threats
Snowflake delivered an impressive fiscal Q2 performance, surpassing analyst projections across key metrics. The cloud data platform reported revenue of $1.55 billion, representing a 35% year-over-year increase and exceeding the Street’s $1.48 billion estimate. Adjusted earnings per share reached 62 cents, substantially higher than the 45-cent consensus forecast.
Snowflake Inc., SNOW
Following the announcement Wednesday after market close, SNOW shares skyrocketed 22% during extended trading. By Thursday’s pre-market session, the stock had advanced 23.27% to reach $376 per share. If sustained, this would represent the fourth-largest single-session jump since the company’s 2020 initial public offering.
The company’s product revenue segment generated $1.49 billion in Q2, reflecting 37% growth from the prior-year period. Snowflake’s net loss contracted to $191.7 million, or 55 cents per diluted share, compared with a $297.9 million deficit in the year-ago quarter.
Looking ahead to Q3, Snowflake projected product revenue of $1.59 billion, topping the analyst consensus of $1.50 billion. Executives also boosted the full fiscal year product revenue outlook to $6.07 billion from the previous $5.84 billion target issued in May.
Additionally, the company elevated its adjusted operating margin projection to 14.5%, an improvement from the 13.5% guidance provided three months earlier.
CoCo AI Assistant Gains Traction
A significant highlight from the earnings call centered on CoCo, Snowflake’s artificial intelligence coding assistant. The platform now serves 9,100 accounts, representing growth of more than 2,000 accounts throughout the quarter. Company leadership emphasized CoCo as a critical catalyst for revenue expansion and deeper enterprise adoption.
CNBC’s Jim Cramer featured Snowflake on his Mad Money program, declaring the stock positioned for a substantial upward movement. He emphasized that Snowflake provides businesses with an efficient method to purchase on-demand computing resources. Cramer’s CNBC Investing Club maintains a position in Broadcom, though he expressed greater caution regarding that holding after its Q4 outlook fell marginally short of forecasts.
Burry Raises Valuation Concerns
Not all investors share the enthusiasm. Michael Burry, the hedge fund manager famous for predicting the 2008 financial crisis depicted in “The Big Short,” described Snowflake as “very overvalued” in a recent Substack commentary. He cautioned that the company confronts an “existential threat” should data lakes prove increasingly susceptible to cyberattacks as artificial general intelligence and quantum computing technologies advance.
Burry further suggested that if corporations choose to internalize AI development and maintain data on proprietary infrastructure, demand for third-party platforms like Snowflake might diminish.
Despite Burry’s skepticism, Wall Street analysts remain overwhelmingly bullish. SNOW holds a Strong Buy consensus rating based on 23 Buy recommendations and three Hold ratings. The average analyst price target stands at $368.68, suggesting approximately 20.6% upside potential from pre-earnings trading levels.
Prior to Wednesday’s market close, SNOW had already climbed 39% year-to-date, significantly outperforming the S&P 500’s roughly 12% gain over the same period.
The post Snowflake (SNOW) Stock Soars 22% on Strong Q2 Earnings Beat—Wall Street Weighs In appeared first on Blockonomi.
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