Shares of Snowflake (SNOW) soared in aftermarket trading after reporting second-quarter earnings that exceeded analyst expectations. The cloud-data platform provider reported adjusted earnings of 22 cents per share on revenue of $674 million, a 36% increase from the same period last year. However, the stock’s gains were erased in early trading on Thursday. Snowflake officials reaffirmed their sales outlook for the fiscal year 2024 but fell short of analyst expectations. The company’s partnership with Nvidia to build large language models for AI could boost its position in the growing AI market.
Despite an initial surge in shares, Snowflake experienced a decline in early trading following the release of its second-quarter earnings report. The company reported adjusted earnings of 22 cents per share and $674 million in revenue, surpassing analyst predictions. However, Snowflake’s sales outlook for the rest of the fiscal year fell short of expectations, causing some investors to reevaluate their positions. Snowflake’s partnership with Nvidia to develop AI capabilities positions the company to capitalize on the growing demand for AI and machine learning technologies.
While Snowflake’s quarterly results were positive, the stock’s performance in the market remains volatile. The company’s focus on reducing cloud service costs aligns with the overall trend among large companies. Snowflake’s revenue from product sales increased by 37% year-over-year, but concerns about software costs persist among customers. Despite these challenges, William Blair analyst Jason Ader remains optimistic, emphasizing the company’s profitability improvements and its potential for growth with the adoption of AI. SNOW stock closed the regular trading session higher but has seen a decline this quarter.
