By The move: Snowflake soared over 12% on Thursday, trading as high as $188 per share in the early morning. The upswing is helping reverse a stretch of losses that have dragged shares of the software firm down since February 18.
The chart:
Why: Better-than-expected earnings and surprisingly upbeat guidance are fueling Snowflake's surge.
A deeper push into AI is helping boost earnings and forward guidance. In the last year, the company has integrated its tools with large AI language models, and on Wednesday, it announced an expanded partnership with Microsoft that enables customers to use OpenAI directly on Snowflake's platform.
The software maker expects revenue growth to outpace consensus expectations, thanks to a lineup of new products. Snowflake said that product revenue is expected to rise to $4.28 billion through January 2026, a 24% increase.
According to Bloomberg, analysts were estimating $4.23 billion.
What it means:
The firm's strong earnings and upbeat guidance offered investors a reprieve after a tough 2024 when the stock fell more than 20%. It is also encouraging as investors eye software as the next leg of the AI trade.
Snowflake's surge outpaced AI stalwart Nvidia on Thursday morning. Nvidia's earnings handily beat estimates, but the reaction from investors was lukewarm. The stock was down almost 3% shortly after the opening bell.
Snowflake also outshined software peer Salesforce, which was down 4% Thursday morning. The company downplayed the upside potential of AI on this year's business, telling investors that its Agentforce tool would have a "modest" impact on revenue in 2025.
