SNOW - This Is Snowflake's Biggest Problem Right Now
2023-08-31 09:30:00 ET
Snowflake (NYSE: SNOW) is a young cloud computing company benefiting from the emergence of artificial intelligence (AI) as businesses look to expand in that realm. Yet despite what should be some positive catalysts for the company this year, investors aren't feeling all that excited about Snowflake. Year to date, the stock has gained less than 4% even as the S&P 500 has increased 15%, and other tech stocks have been soaring much higher.
There are signs of weakness in Snowflake's business, and investors are concerned that things could get worse.
The data cloud specialist reported earnings last week for its second quarter of fiscal 2024 (which ended on July 31). It was a good showing for the company. Revenue of $674 million was up 36% year over year. Snowflake's net revenue retention rate was 142%, which tells us that existing customers are spending more money with the business than they were a year ago -- always a positive sign.
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This Is Snowflake's Biggest Problem Right Now