What Happened?
Shares of cloud data platform provider Snowflake (NYSE: SNOW) fell 1.9% in the morning session as the stock pulled back in a likely case of profit-taking after surging earlier in the week on the back of strong second-quarter earnings and subsequent analyst upgrades.
The data-warehousing company reported its quarterly results on Wednesday, August 27, posting revenue of $1.14 billion and adjusted earnings of $0.35 per share, beating analyst estimates.
Following the strong performance, which was driven by accelerating AI adoption, Snowflake raised its full-year product revenue forecast to $4.395 billion.
The positive results prompted a wave of optimism on Wall Street. Analysts at Oppenheimer, Jefferies, and Goldman Sachs all reiterated their Buy ratings and raised their price targets for the stock, citing AI tailwinds and robust demand for the company's data platform.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Snowflake? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Snowflake’s shares are quite volatile and have had 16 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock gained 20.6% on the news that the company reported second-quarter results that surpassed Wall Street's expectations on several key metrics.
The company posted revenue of $1.14 billion, up 31.8% year-over-year, and adjusted earnings of $0.38 per share, both comfortably beating analyst consensus estimates. Profitability was a significant highlight, with adjusted operating income of $127.6 million smashing expectations by over 44%.
Furthermore, Snowflake's billings, an indicator of future revenue, grew an impressive 40.2% year-over-year to $1.09 billion. The company also saw its net revenue retention rate improve to 125%, indicating that existing customers are increasing their spending on the platform. Overall, the strong performance across revenue, profit, and customer metrics fueled investor optimism.
Snowflake is up 50.6% since the beginning of the year, and at $237.19 per share, it is trading close to its 52-week high of $241 from August 2025. Investors who bought $1,000 worth of Snowflake’s shares at the IPO in September 2020 would now be looking at an investment worth $934.16.
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