TLDR
- Snowflake beat on earnings per share (62 cents vs 45 cents expected) and revenue ($1.55B vs $1.48B expected)
- SNOW stock jumped 22% after hours, with pre-market trading pushing it up over 23% to $376 per share
- Jim Cramer called SNOW primed for a “huge move” following the Q2 results
- AI coding agent CoCo now has 9,100 accounts, up 2,000+ during the quarter
- Michael Burry pushed back, calling Snowflake “very overvalued” and flagging data security risks
Snowflake posted a strong fiscal second quarter, beating Wall Street on both the top and bottom lines. Revenue came in at $1.55 billion, up 35% year over year, beating the $1.48 billion consensus. Adjusted earnings per share hit 62 cents, well above the 45 cents analysts expected.
The stock surged 22% in after-hours trading on Wednesday. By pre-market Thursday, it had climbed 23.27% to $376 per share. That would mark the fourth-largest single-day gain since Snowflake went public in 2020.
Product revenue for Q2 came in at $1.49 billion, up 37% year over year. The net loss narrowed to $191.7 million, or 55 cents per share, down from a $297.9 million loss in the same quarter last year.
For Q3, Snowflake guided for $1.59 billion in product revenue, above the $1.50 billion analyst consensus. Management also raised the full-year product revenue forecast to $6.07 billion, up from $5.84 billion in May.
The company also widened its adjusted operating margin forecast to 14.5%, up from the 13.5% it had projected in May.
AI Agent CoCo Picks Up Steam
A big part of the story was CoCo, Snowflake’s AI coding agent. The tool now counts 9,100 accounts, an increase of over 2,000 during the quarter. Management pointed to CoCo as a driver of growth and enterprise engagement.
Jim Cramer highlighted Snowflake on CNBC’s Mad Money, calling the stock primed for a “huge move.” He noted that Snowflake gives enterprises a clean way to buy compute capacity on demand. His CNBC Investing Club trust holds a small position in Broadcom, which he was more cautious about after that company’s Q4 guidance came in slightly below expectations.
Michael Burry Isn’t Buying It
Not everyone is on board. Michael Burry, known for “The Big Short,” called Snowflake “very overvalued” in a Substack post. He warned the company faces an “existential threat” if data lakes become too vulnerable to cyberattack as AGI and quantum computing mature.
Burry also noted that if companies bring AI development in-house and keep data on their own servers, demand for platforms like Snowflake could slow.
Wall Street, however, is not siding with Burry. The stock carries a Strong Buy consensus from 23 Buy ratings and three Holds. The average price target sits at $368.68, which implies around 20.6% upside from pre-earnings levels.
As of Wednesday’s close, SNOW was already up 39% year to date, compared to roughly 12% for the S&P 500.
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