*C3.ai and Microsoft shake-hands*

Snowflake: “Hold my beer…”

Well friends, Snowflake reminded us all that they are still the cool kids in the cloud data space yesterday. The company reported third-quarter earnings that weren’t just good—they were snow-storm-level good. Shares skyrocketed 20% in early trading after Snowflake crushed expectations, raised its full-year guidance, dropped news of a buzzy AI partnership, and threw in an acquisition for good measure. (Microsoft and C3.ai are legit punching air rn). 

(Source: Giphy) 

First off, let’s start with the receipts. Snowflake posted product revenue of $900.3 million, up 29% year-over-year, and well above the $856.6 million Wall Street was expecting. Total revenue clocked in at $942.1 million, also beating the consensus estimate of $898.46 million. And oh yeah, adjusted earnings per share came in at $0.20, stomping on analysts’ $0.15 prediction.

(Source: Seeking Alpha) 

For the current quarter, Snowflake projects product revenue between $906 million and $911 million, easily topping the $890.7 million analysts had penciled in. Full-year product revenue is now expected to hit $3.43 billion—up 29% year-over-year—and smashing the prior estimates of $3.36 billion. CEO Sridhar Ramaswamy summed it up: "Snowflake delivered a strong third quarter." (a.ka. understatement of the year, Sridhar). 

In addition, let’s not forget the $5.7 billion in remaining performance obligations (RPO)—a fancy way of guidance 2.0 that basically states, “Here’s all the money we’re about to make but haven’t counted yet.” That’s a 55% jump from last year, which… you guessed it… is BIGLY. 

(Source: Yahoo Finance) 

So yeah, Snowflake basically took analysts projections behind the barn and shot ‘em. But if crushing earnings wasn’t enough, Snowflake also dropped a headline-grabbing partnership with Anthropic, the AI darling behind the Claude large language models. Simply put, Snowflake customers will now get access to Anthropic’s Claude 3.5 Sonnet model directly within Snowflake’s ecosystem on AWS. Which for those who haven’t played with Claude yet just means Snowflake customers can officially work smarter not harder. 

(Source: Giphy) 

In fact, Christian Kleinerman, Snowflake’s EVP of Product, put it best saying this partnership is a “massive leap forward” in delivering enterprise-ready AI solutions. And when he says massive leap, he means throwing up a massive middle finger to Microsoft and C3.ai. 

The best part? Snowflake wasn’t done with its earnings clinic. They also announced the acquisition of Datavolo, a startup that makes it easier to wrangle unstructured data (think all those random bits of info floating around that fuel generative AI). The move is meant to simplify data processing for customers while opening up new AI application possibilities."By bringing Datavolo into the Snowflake fold, we’re unlocking simplicity and cost savings for our customers," Ramaswamy said. Translation: We make more money when you save more money. 

(Source: Snowflake) 

Now looking at 2024 as a whole, this kind of performance for Snowflake is what TD Cowen’s Derrick Wood is calling a “turning point”. See, it’s no secret that Snowflake has had a rough year, plunging -44%--- but now, with Snowflake’s focus on product cohesion, customer expansion, and AI adoption—things seem to be paying off as they displace their competitors left, right, and twice on Sunday. 

Hell, even Piper Sandler’s Brent Bracelin, who previously described investor sentiment as “frigid,” is now singing a different tune. Snowflake’s ability to overdeliver in a challenging environment has sparked optimism that the company’s growth story is far from over.

(Source: Investing.com)

So in the end, Snowflake didn’t just beat expectations—it crushed them, threw in an AI partnership, announced an acquisition, and left Wall Street scrambling to keep up. Shares surged 20%, marking the stock’s biggest pop since August 2022.  Now again, sure the company has had its rough patches, but this quarter was definitely a mic drop moment.

So given this, if you’re looking to get caught up in this snow storm, please do your due diligence and place your bets accordingly. The hype is there, but can Snowflake keep up the momentum? Only time will tell. In the meantime though, enjoy your Thursday–and as always, stay safe and stay frosty, friends! Until next time…

P.S. I’ll be honest, I’m not one to overhype things, but here’s the deal: The next alert we’ll be dropping this week? It’s a game-changer. And if you miss out, well, it could be costly. Click here ASAP for the details. 

Stocks.News holds positions in Microsoft as mentioned in the article.