On Thursday, Snowflake's shares soared by 35%, marking the company's best day ever, following its announcement of a substantial $6 billion investment in Amazon's compute services and better-than-expected earnings driven by artificial intelligence momentum.
The company reported fiscal first-quarter adjusted earnings per share and revenue that surpassed Wall Street's expectations, with finance chief Brian Robins highlighting that AI tools like Cortex Code are significantly enhancing the company's revenue potential.
Snowflake also raised its guidance for the upcoming quarter, projecting a 12.5% adjusted operating margin on product revenue between $1.415 billion and $1.420 billion, exceeding analyst predictions.
This positive performance alleviated fears of a 'SaaSpocalypse,' a term used to describe concerns that AI tools might replace traditional software as a service, which had previously led to a selloff in the sector. The strong results also positively impacted other software stocks, with ServiceNow, Oracle, and Palantir seeing gains.
Additionally, Snowflake reported adding 616 net new customers, a 38% year-over-year increase, and announced plans to acquire AI startup Natoma, further solidifying its commitment to AI development. Analysts at JPMorgan noted that Snowflake's growth profile and cash flow dynamics should demonstrate the strength of its business model over time