Snowflake Ltd. (SNOW) is a data cloud company that crafts valuable insights, orchestrates consolidated data, constructs data applications, and facilitates data sharing. The company, formerly known as Snowflake Computing Inc., underwent a rebranding to Snowflake Inc. in 2019, setting the stage for its monumental IPO in 2020. Established in Montana, Snowflake boasts a market capitalization of $52 billion, catering to over 3,000 clients across the Asia-Pacific, EMEA regions, and the Americas.
Snowflake’s stock has witnessed a 21% decline year-to-date, plummeting nearly 34% from its peak of $237.72 in February.
Snowflake made headlines by surpassing market expectations during its 4Q earnings call in late February. The company reported a revenue of $774.7 million, outshining the projected $759.6 million, reflecting a remarkable 32% year-over-year growth. Non-GAAP EPS stood at $0.35, exceeding forecasts of $0.18, while gross margin surged from 65.1% to 68.8%.
On an annual basis, Snowflake raked in $2.67 billion in revenue, embodying a substantial 38% YoY surge, with EPS soaring to $0.98 from $0.25 in the previous year. However, the company’s 1Q 2025 revenue guidance of $745 million to $750 million hints at a moderated growth pace of 26% to 27%, compared to its 33% in Q4 and 38% in 2024.
Gearing up for a transformation, Snowflake bid farewell to CEO Frank Slootman, who passed the baton to their AI-savvy Senior Vice President, Sridhar Ramaswamy, thr catalyst for a subsequent 18% stock slump post-announcement.
Snowflake Forges Ahead with ‘Snowflake Arctic’
Snowflake has unleashed its innovative OpenAI model, christened “Snowflake Arctic.” This enterprise-grade large language model (LLM) is tailored for intricate workloads and excels in industry-standard SQL coding assessments. The company’s plan to furnish the model under an Apache 2.0 license makes it accessible for personal and commercial utilization.
Proclaiming it as a pivotal milestone, Snowflake’s newly appointed CEO, Sridhar Ramaswamy, emphasized the groundbreaking strides of the AI research team at Snowflake.
The Snowflake Arctic model is slated for integration into Amazon Web Services, NVIDIA API catalog, Microsoft Azure, Lamini, Perplexity, Hugging Face, among other platforms, with current availability limited to Snowflake Cortex.
CEO’s Insider Purchase Signals Confidence in Snowflake
Emphasizing faith in Snowflake’s trajectory, CEO Sridhar exhibited his confidence by acquiring 31,542 SNOW shares on March 25, averaging at $158.52 per share. This investment amounted to over $5 million, boosting his stake in the company to 0.0777%.
Another show of confidence came from board member Mark McLaughlin, who purchased over 3,000 SNOW shares worth $501,314 at the beginning of March. His previous purchase of $300,000 in stock in May 2023, right after joining the board, further underscores a vote of confidence.
Analysts Bullish on Snowflake’s Prospects
Analysts, with a consensus ‘Moderate Buy’ rating, see Snowflake as a promising investment with a mean price target of $205.76 – signaling a potential 31.6% upside from current levels. At present, 41 analysts cover the stock, with 25 rating it a ‘Strong Buy’, 3 a ‘Moderate Buy’, 11 a ‘Hold’, and 2 a ‘Strong Sell’ for Snowflake.
