Shares of Snowflake soared late Wednesday after the software company reported quarterly results that beat Wall Street's estimates.
Snowflake posted third-quarter adjusted earnings of 20 cents a share on revenue of $942.1 million. Analysts surveyed by FactSet were expecting earnings of 15 cents a share on revenue of $899 million.
The stock was up 13% in after-hours trading following the report.
This is breaking news. Please come back for more updates and analysis and read below for a preview of the earnings.
Snowflake stock has fallen by about $100 this year. Will its financial results, scheduled for after the market close on Wednesday, be enough to spark a comeback rally?
Analysts surveyed by FactSet expect the software company to post earnings of 15 cents a share on revenue of $899 million in the third quarter. In the same period last year, Snowflake reported earnings of 25 cents a share on revenue of $734 million.
Software stocks have gotten a boost in recent months as companies invest heavily in generative artificial projects. Earlier this month, Palantir Technologies and Cisco Systems both reported better-than-expected financials for their latest quarters and increased their respective outlooks for the year, citing strong AI technology demand.
Analysts believe the results from other companies in the space bode well for Snowflake. Shares of Snowflake were higher heading into the report, ending Tuesday up 2.2% at $130.24.
"Azure and AWS growth rates were more or less in line and consistent with prior quarters (34% y/y Azure growth and 19% for AWS), likely foreshadowing SNOW's quarter," Loop Capital analyst Mark Schappel wrote in a note on Monday. He rates Snowflake a Buy with a $185 price target.
Snowflake shares have tumbled 35% this year. Concerns about competition, high costs, a CEO departure, and a hefty valuation have weighed on the stock. Shares of Snowflake are trading at 149 times earnings expected over the next 12 months.
Of the 45 analysts surveyed by FactSet, 31 say the stock is a Buy, 13 say it's a Hold, and one says it's a Buy.
"We see a large and compelling long-term growth opportunity for SNOW in the cloud data analytics space as companies continue to migrate workloads into cloud environments and utilize machine data to make better business decisions," BTIG analyst Gray Powell wrote in a note on Tuesday. He rates the stock as Neutral without a price target due to uncertainty in a competitive environment.