Snowflake shares soar after strong earnings lessen software fears
Speakers
Seema Mody
— Technology and Global Markets Correspondent, CNBC
Kelly Evans
— Anchor, The Exchange (CNBC)
Summary
Snowflake shares jumped after strong earnings showed accelerating growth and a raised profit outlook, driven by AI data demand and customer gains from its CoCo AI coding tool. Seema Mody explains the report is part of broader software strength, with Twilio, Palantir, CrowdStrike, and Okta also beating expectations and softening the AI bear case. The host notes Salesforce and Microsoft are also strong, while Morgan Stanley wants more evidence of accelerating growth, agent adoption, and a consumption-model shift.
- Snowflake rose 20% and traded near all-time highs after strong earnings.
- Snowflake's growth is accelerating and its profit outlook was raised for a third straight quarter.
- AI adoption is boosting demand for Snowflake's data analytics platform.
- Snowflake's CoCo AI coding tool added about 2,000 customers in the quarter.
- Twilio, Palantir, CrowdStrike, and Okta also reported better-than-expected results.
- Morgan Stanley said the reports soften the AI bear case but the rally needs fundamental follow-through.
- Salesforce and Microsoft were also strong as software stocks made a stand.
Ideas
Snowflake accelerates growth on AI data demand
Snowflake is an accelerating growth story that raised its profit outlook for the third consecutive quarter. As companies adopt AI, Snowflake's data analytics platform helps make data actionable, and its AI agent coding tool CoCo added about 2,000 new customers this quarter, bringing the total to over 9,000. Snowflake also has partnerships with both Anthropic and OpenAI.
Software reports soften AI bear case
Twilio, Palantir, CrowdStrike, and Okta all delivered better-than-expected reports, and together with Snowflake's numbers these results soften the AI bear case for traditional software and raise the debate on whether software companies will be replaced by AI.
