Nov 29 (Reuters) – Snowflake (SNOW.N) has forecasted that its quarterly product revenue will outperform expectations, attributing this to the rising adoption of artificial intelligence driving the demand for its data cloud services.
This announcement led to a notable surge of almost 7% in the stock price of the Bozeman, Montana-based company during after-hours trading.
The uptick in spending on cloud-related software indicates the growing inclination of businesses to capitalize on the AI surge in the tech sector over the past year.
Snowflake expects its product revenue for the fourth quarter to be within the range of \(716 million and \)721 million, exceeding the average analyst forecast of $700.3 million, as indicated by data from LSEG.
As per Gartner, the global end-user spending on public cloud services is projected to witness a growth rate of 20.4% by 2024.
In a recent update, Snowflake unveiled the Snowflake Cortex service, aimed at empowering enterprises to develop comprehensive language models crucial for generative AI applications.
During the third quarter, the company recorded a 32% revenue growth to \(734.2 million, surpassing the \)713.1 million estimate.
The product revenue, derived from customers’ utilization of compute, storage, and data transfer resources on its integrated platform, exceeded expectations at $698.5 million for the quarter ending on Oct. 31.
Excluding extraordinary items, the third-quarter earnings per share reached 25 cents, surpassing the analysts’ consensus of 16 cents.
