After announcing its financial report, AI software company Snowflake closed up 32.71%, the highest increase since its listing, far exceeding market expectations and even overshadowing Nvidia, which also released its financial report.
The sharp rise in Snowflake's stock price has driven the software, network security concept, and cloud sectors, with MongoDB up 12%, Elastic up 6%, IBM up over 3%, and Safran up 3%.
RuiSui analyst Jordan Klein stated that software stocks have performed better than semiconductor stocks, which may be the trend in the coming months.
Snowflake is a database company that positions itself as an "artificial intelligence data cloud company" and is committed to providing customers with the simplest and most cost-effective enterprise data platform.
The company's financial report released on Wednesday night showed that its third quarter performance significantly exceeded analysts' expectations. Specifically, the company's revenue in the third quarter reached $942 million, higher than the expected $897 million.
Snowflake expects fourth quarter product revenue to be between $906 million and $911 million, which means an annual growth rate of approximately 23%.
Snowflake has also raised its product revenue forecast for this year, expecting product revenue for the 2025 fiscal year to reach $3.43 billion, a year-on-year increase of 29%, which is higher than the management's forecast of $3.36 billion three months ago.
At the same time, Snowflake's annual adjusted operating profit margin has been raised to 5%, higher than the August expectation of 3%.
It is worth mentioning that Snowflake's existing contract amount has increased by 55%, reaching $5.7 billion. As of the end of October, Snowflake had a total of 10618 customers, with 369 new customers added in the most recent quarter. Snowflake's major customers increased by 25% year-on-year, reaching 542.
Snowflake management expressed confidence in the new product and competition in the artificial intelligence market during the conference call. They pointed out that there are now 3200 customers using the company's artificial intelligence and machine learning products every week, compared to 2500 in the previous quarter and almost zero a year ago.
At the same time as announcing its financial report, Snowflake also announced a multi-year partnership with large model startup Anthropic.
Snowflake has previously allowed customers to access open-source models from Google, Meta Platforms, and Mistral AI. However, Anthropic's Claude Large Model is the closest in performance and functionality to OpenAI's product. Adding Anthropic's LLMs to it can enhance Snowflake's image in the minds of data scientists and artificial intelligence researchers, as they typically use products from competitor VNet.
Banks and other Snowflake major clients tend to use large models to build applications on servers close to their data storage locations. Adding Anthropic big model support can help Snowflake persuade customers to save their data in their database instead of transferring it to cloud providers such as Amazon.
In addition, Snowflake has taken multiple measures this year to enhance its artificial intelligence products, such as launching tools for building AI chatbots that companies can train using internal data.
In May of this year, Snowflake acquired TruEra, a startup that helps developers evaluate and monitor artificial intelligence models and applications driven by large models.
According to a research report by Tianfeng Securities, the commercialization of AI is gradually being implemented, and the demand for AI related products remains strong. With the uncertainty surrounding the US presidential election, the underlying fundamentals remain the core determining factor for the medium to long term trend of US technology stocks. It is recommended to continue monitoring the progress of AI commercialization and the supply and demand of AI related hardware in technology companies.