Snowflake Soared Nearly 33% After Earnings Beat Estimates

 

AI software company Snowflake (NYSE: SNOW) announced its earnings in late November 20. Thus, on November 21, its stock in the US market rocketed and closed up 32.71%, reaching its highest point since the listing.

 

Snowflake's earnings report for the third quarter of fiscal 2025 showed that quarterly revenue reached $942.1 million, growing 28% year-over-year (YoY) and exceeding analysts' estimates of $897 million. It expects fourth-quarter product revenue to be $906 - $911 million, implying an annual growth rate of about 23%.

 

 

Looking ahead, Snowflake expected product revenues to reach $3.43 billion in fiscal 2025, implying a 29% increase. Accordingly, Snowflake raised its adjusted operating margin projection from 3% to 5%. More notably, Snowflake's large customers grew 25% YoY to 542.

 

Snowflake management said on the earnings call that they are confident in their new products and in competing in the AI market.

 

Snowflake also announced a multi-year partnership with big model startup Anthropic, whose big AI model, Claude, resembles OpenAI's product the most. Snowflake believes that this partnership can upgrade its profile in the AI industry. Anthropic's Claude can help Snowflake persuade large customers such as banks to keep their data in its database. In addition, Snowflake has enhanced its AI offerings such as tools for building AI chatbots.

 

Snowflake's surge drove up software, cybersecurity, and cloud computing sectors in yesterday's US market. On this collective rise, Mizuho BANK analyst Jordan Klein remarked that it might be the future tendency for AI software stocks to outperform semiconductor stocks. Tianfeng Securities research report advised investors to focus on AI commercialization and the supply and demand of AI-related hardware, considering that they can determine the long-term trend of US tech stocks.