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Snowflake Ltd. (SNOW) is a data cloud company. It provides useful insights, designs consolidated data, builds data applications, and aids in data sharing. Formerly known as Snowflake Computing Inc., the company changed its name to Snowflake Inc. in 2019, ahead of its blockbuster 2020 IPO. Based in Montana, and valued at $52 billion by market cap, SNOW serves more than 3,000 customers in the Asia-Pacific and EMEA regions, as well as the Americas.
Snowflake stock is down 21% YTD, and off nearly 34% from its 52-week high of $237.72 in February this year.
Snowflake reported its 4Q results in late February, with revenue of $774.7 million beating analysts' estimated $759.6 million, and showing a growth rate of 32% YoY. Non-GAAP EPS came in at $0.35 against analysts' $0.18 prediction, and gross margin increased from 65.1% to 68.8%.
On the full-year front, Snowflake’s revenue stood at $2.67 billion, representing a 38% increase YoY, while EPS came in at $0.98 from $0.25 the prior year. On the other hand, its revenue outlook of $745 million to $750 million for 1Q 2025 signified a slower growth rate of 26% to 27%. For comparison, its revenue growth was 33% in Q4 and 38% in 2024.
Surprisingly, the company also announced the retirement of CEO Frank Slootman, who is now succeeded by their senior vice-president of AI Sridhar Ramaswamy.
As a result, the stock plunged 18% on the day of results and has fallen more than 30% since.
Snowflake Unveils New OpenAI Model
Snowflake has since unveiled its new OpenAI model dubbed “Snowflake Arctic.” It is an enterprise-grade large language model (LLM) designed to handle complex workloads while excelling in several industry SQL coding benchmarks. Snowflake plans to deliver the model with an Apache 2.0 license, making it usable for personal as well as commercial use.
"This is a watershed moment for Snowflake, with our AI research team innovating at the forefront of AI," said Snowflake's new CEO, Sridhar Ramaswamy.
The model is set to be available on Amazon (AMZN) Web Services, NVIDIA (NVDA) API catalog, Microsoft (MSFT) Azure, Lamini, Perplexity, Hugging Face, and more. For the time being, Arctic is available for use in Snowflake Cortex.
CEO's Insider Purchase
Notably, Snowflake CEO Sridhar purchased about 31,542 shares of SNOW on March 25, at an average price of $158.52 per share. The total value of the stake is over $5 million, taking his overall stake in the company to 0.0777%.
In the beginning of March, Mark McLaughlin, one of its board members purchased more than 3,000 shares worth $501,314. He previously purchased $300,000 worth of stock back in May 2023, right after being appointed to the board.
Analysts Say SNOW Stock Is a Buy
Snowflake has a consensus “Moderate Buy” rating from analysts, with a mean price target of $205.76 - translating to a 31.6% upside potential from the current level. At present, 41 analysts are covering the stock, of which 25 have a “Strong Buy” rating, 3 have a “Moderate Buy” rating, 11 have a “Hold” rating, and 2 have a “Strong Sell” rating for Snowflake.
