Key Highlights
- Snowflake delivered earnings of 62 cents per share versus the 45-cent consensus, while revenue reached $1.55 billion against expectations of $1.48 billion
- Shares of SNOW exploded 22% in after-hours trading, extending gains to over 23% by Thursday pre-market to reach $376
- CNBC’s Jim Cramer identified SNOW as positioned for a “huge move” based on the quarterly performance
- The company’s AI coding tool CoCo expanded to 9,100 accounts, representing a quarterly increase of more than 2,000 users
- Investor Michael Burry countered the enthusiasm, labeling Snowflake “very overvalued” while raising concerns about data vulnerability
The cloud data platform company delivered impressive fiscal Q2 results that surpassed analyst projections across all major metrics. Total revenue reached $1.55 billion, representing a 35% year-over-year increase and exceeding the Street’s $1.48 billion estimate. Adjusted earnings per share registered at 62 cents, significantly outperforming the consensus forecast of 45 cents.
Investor enthusiasm sent shares soaring 22% during Wednesday’s after-hours session. The momentum continued into Thursday’s pre-market, where the stock advanced 23.27% to $376 per share. This performance would represent the fourth-strongest single-session gain since the company’s 2020 initial public offering.
Product revenue totaled $1.49 billion for the quarter, reflecting a 37% year-over-year expansion. The company’s net loss contracted to $191.7 million, translating to 55 cents per share, an improvement from the $297.9 million deficit recorded in the prior-year period.
Looking ahead to Q3, management projected product revenue of $1.59 billion, surpassing the analyst consensus of $1.50 billion. The company also upgraded its full-year product revenue outlook to $6.07 billion from the previous $5.84 billion guidance issued in May.
Additionally, Snowflake expanded its adjusted operating margin projection to 14.5%, representing a one-percentage-point increase from the 13.5% target set three months earlier.
CoCo AI Agent Gains Traction
A significant narrative from the earnings report centered on CoCo, Snowflake’s artificial intelligence coding assistant. The platform now serves 9,100 accounts, marking an expansion of more than 2,000 users throughout the quarter. Company leadership emphasized CoCo as a catalyst for accelerated growth and deeper enterprise adoption.
CNBC’s Jim Cramer featured Snowflake on his Mad Money program, characterizing the stock as positioned for a “huge move.” He emphasized that Snowflake provides enterprises with an efficient method to purchase on-demand compute resources. Cramer disclosed that his CNBC Investing Club trust maintains a modest position in Broadcom, though he expressed more reservation regarding that holding after its Q4 outlook fell marginally short of projections.
Burry Raises Red Flags
The optimism isn’t universal. Michael Burry, the investor famously portrayed in “The Big Short,” characterized Snowflake as “very overvalued” in a recent Substack publication. He cautioned that the company confronts an “existential threat” should data lakes become increasingly susceptible to cyberattacks as artificial general intelligence and quantum computing technologies advance.
Burry further argued that if enterprises choose to internalize AI development and maintain data on proprietary infrastructure, adoption of platforms like Snowflake could decelerate.
Wall Street analysts, however, remain decidedly more bullish than Burry. The stock maintains 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 price levels.
Through Wednesday’s closing bell, SNOW had already appreciated 39% year-to-date, substantially outperforming the S&P 500’s roughly 12% gain over the same timeframe.
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