Quick Summary
- Snowflake delivered impressive Q2 results with EPS of 62 cents versus 45 cents expected and revenue of $1.55B versus $1.48B forecasted
- Shares exploded 22% in after-hours trading, climbing above 23% to $376 in pre-market activity
- CNBC’s Jim Cramer highlighted SNOW as positioned for a “huge move” based on the quarterly performance
- The company’s AI coding tool CoCo expanded to 9,100 accounts, adding over 2,000 users in the quarter
- Investor Michael Burry countered the optimism, arguing Snowflake remains “very overvalued” with significant security vulnerabilities
Snowflake delivered impressive fiscal Q2 results that exceeded analyst expectations across key metrics. The cloud data platform reported revenue of $1.55 billion, representing 35% year-over-year growth and surpassing the Street’s $1.48 billion estimate. Adjusted earnings per share reached 62 cents, significantly outpacing the 45-cent consensus forecast.
Following the announcement Wednesday evening, shares rocketed 22% in extended trading. Thursday’s pre-market session saw the rally intensify to 23.27%, bringing the stock to $376. This performance would represent the fourth-largest single-session gain since the company’s 2020 initial public offering.
The company’s product revenue segment generated $1.49 billion during Q2, reflecting 37% year-over-year expansion. Meanwhile, Snowflake’s net loss contracted to $191.7 million, or 55 cents per diluted share, improving from the year-ago period’s $297.9 million deficit.
Looking forward, management projected Q3 product revenue of $1.59 billion, exceeding the $1.50 billion Wall Street estimate. The company also elevated its full-year product revenue outlook to $6.07 billion from the $5.84 billion guidance issued in May.
Additionally, Snowflake expanded its projected adjusted operating margin to 14.5%, improving from the previously communicated 13.5% target.
CoCo AI Agent Gains Traction
A significant development in the quarter centered on CoCo, Snowflake’s artificial intelligence coding assistant. The platform has reached 9,100 active accounts, representing an expansion of more than 2,000 users throughout the three-month period. Company leadership emphasized CoCo as a catalyst for sustained growth and deeper enterprise adoption.
CNBC’s Jim Cramer featured Snowflake during his Mad Money program, describing the stock as prepared for a “huge move.” He emphasized that Snowflake provides businesses with an efficient mechanism to purchase compute resources as needed. Cramer’s CNBC Investing Club maintains a modest stake in Broadcom, though he expressed reservation following that firm’s Q4 outlook falling marginally short of projections.
Burry Raises Red Flags
The enthusiasm isn’t universal. Michael Burry, the investor famous for his portrayal in “The Big Short,” described Snowflake as “very overvalued” in a recent Substack publication. He cautioned that the company confronts an “existential threat” should data repositories become increasingly susceptible to cyber intrusions as artificial general intelligence and quantum computing technologies advance.
Burry further suggested that if enterprises shift AI development internally and maintain data on proprietary infrastructure, adoption of platforms like Snowflake might decelerate.
Despite Burry’s skepticism, Wall Street analysts remain largely bullish. 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% appreciation from pre-earnings price levels.
Through Wednesday’s trading close, SNOW had already gained 39% year-to-date, substantially outperforming the S&P 500’s roughly 12% advance during the same timeframe.
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