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Should you look into Snowflake $SNOW?
Hello everyone and a happy Monday!
Today, we're taking a quick look at Snowflake. For those unfamiliar, Snowflake is a cloud-based data warehouse company targeting enterprises.
There's a lot happening with Snowflake, and we're here to unfold it for you.
Snowflake is catching the attention of analysts, investors, and industry experts alike.
Just recently:
- They announced their Q2 '23 Performance
- DA Davidson initiated coverage on Snowflake with a Buy recommendation.
- Snowflake was mentioned by Jim Cramer (so maybe reconsider?)
First, some AI background
You might be aware that the current buzz in technology is AI, specifically generative AI.
Snowflake is primed to capitalize on the AI trend, with the company recently sharing their AI vision.
Snowflake has recently adopted large language models (LLMs) to optimize data extraction and interaction. Through Snowpark Container Services, they offer direct access to leading LLMs like AI21 Labs and NVIDIA's NeMo framework.
Their recent integration with Streamlit marks a significant step in enhancing the user experience. Recognized for creating interactive applications with Python, Streamlit is a favorite for building UIs for LLM-powered apps.
With over 7,000 LLM-driven Streamlit apps already in the Community Cloud, Snowflake users can now benefit from enhanced governance.
The combined prowess of container services and Streamlit means efficient UI creation for LLM apps, bolstering Snowflake's data platform.
Snowflake has also acquired two companies lately which are involved in the AI space: Applica and Neeva.
Q2 '23 Performance
As the second quarter of 2023 comes to a close, Snowflake's financials provide a clear window into the company's health and trajectory. Here's a breakdown:
- Product Revenue Growth: 78% YoY, underscoring the company's swift growth.
- Net Revenue Retention: 142%, a testament to robust customer loyalty.
- $1M+ Product Revenue Customers: A total of 402, up from 374 in Q1 '23 and 248 in Q2 '22, marking a 62% YoY growth.
"This was a strong renewal quarter, with our largest customer renewing under existing terms," stated Snowflake CFO, Michael Scarpelli.
D.A Davidson Initiates Coverage on Snowflake
The recent performance might have influenced D.A Davidson to initiate coverage on Snowflake.
They highlighted Snowflake's "best-in-class growth rates" and its potential to benefit from the rising demand for AI. D.A Davidson predicts a 26.97% upside, setting a one-year price target at $202.95 as of August 31, 2023.
Lastly, Jim Cramer shared insights on Snowflake in his daily segment and advised keeping an eye on it.
Snowflake's recent developments, from its AI innovations to its robust Q2 performance, paint a promising picture. We will keep an eye on Snowflake's adaptability and how it leverages its partnerships, especially with tech giants like Microsoft. The upcoming quarters will be a litmus test for Snowflake's strategies and their execution.
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