Snowflake's shares experienced a remarkable surge of over 36% on Thursday, marking their strongest single-day performance ever, following the announcement of a $6 billion investment in compute services from Amazon.
This surge was further supported by the company's fiscal first-quarter earnings, which exceeded expectations, driven by demand for its artificial intelligence tools, particularly Cortex Code (CoCo). HSBC analyst Stephen Bersey emphasized that CoCo has shown significant growth, with over 7,100 accounts contributing to meaningful AI revenue.
He believes this indicates a strong momentum for Snowflake's AI monetization opportunities. Despite the recent surge, Snowflake's stock is only up 9% year-to-date, lagging behind the S&P 500's 10.5% increase, after facing earlier declines due to concerns about AI competition in the software-as-a-service sector.
Overall, the outlook remains positive, with 45 out of 52 analysts rating the stock as a buy or strong buy, suggesting confidence in Snowflake's future growth prospects