Shares of Snowflake Inc. (SNOW) surged by 19.89% on Wednesday, driven by the company's impressive third-quarter financial results, raised full-year guidance, and strategic moves to bolster its AI capabilities.
In its Q3 earnings report, Snowflake exceeded Wall Street's expectations, with revenue of $942.1 million (up 28% year-over-year), beating the consensus estimate of $899.3 million. The company's product revenue grew by 29% to $900.3 million, fueled by strong customer demand for its cloud-based data platform. Additionally, Snowflake reported a net revenue retention rate of 127%, indicating solid customer engagement and expansion.
Encouraged by the robust performance, Snowflake raised its full-year product revenue guidance to $3.43 billion, representing a 29% year-over-year increase. The company's Q4 product revenue outlook of $906 million to $911 million also surpassed analysts' expectations, signaling continued momentum.
Snowflake's stock rally was further boosted by its strategic moves in the rapidly growing artificial intelligence (AI) space. The company announced a multi-year partnership with AI research firm Anthropic, which will enable Snowflake customers to leverage Anthropic's advanced AI language models, such as Claude 3.5, within the secure and compliant environment of Snowflake's platform. This collaboration aims to empower enterprises in building AI-powered applications, chatbots, and data analytics solutions.
Furthermore, Snowflake disclosed plans to acquire Datavolo, an open data integration platform, to enhance its capabilities in managing and analyzing diverse data types, a critical component of enterprise AI initiatives. These strategic moves position Snowflake to capitalize on the rising demand for AI-driven solutions in the data analytics market.
