Yesterday and today have been quite exciting for investors and onlookers in the cloud-computing and niche software markets. They got not just one or two, but four different earnings reports to mull over. However, there’s more than just mulling going on as a number of software stocks are flying high today, while one is melting down on heavy trading volume.
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Shares of cloud king Snowflake (NYSE: SNOW) moved up 4% today, even as tech stocks generally wobbled this morning. The company demonstrated very strong product revenue growth in the third quarter, along with an impressive net revenue retention rate. Plus, Snowflake handily beat analysts’ consensus forecasts. Moreover, today’s financial traders didn’t seem to mind the CFO’s admittedly “conservative” forward revenue guidance.
Meanwhile, software and cloud solutions provider Splunk (NASDAQ: SPLK) stunned the experts with a massive positive earnings surprise. The company also beat the Street’s sales forecast for 2022’s third quarter while also raising its full-year 2022 profit, revenue, and cash flow guidance. Granted, Splunk reported a net loss for the third quarter, but today’s traders weren’t perturbed by this as the company’s loss appears to be narrowing. All in all, the sentiment was bullish as SPLK stock gained 13% in afternoon trading.
The Big Winner and the Exception to the Rule
The stock in this group that ran the furthest today, however, was cloud-based identify verification specialist Okta (NASDAQ: OKTA). We’re talking about a 23% rally by noon Eastern time today in OKTA stock, owing to the company’s third-quarter revenue and earnings beats. Okta disclosed outstanding across-the-board results, including gains in customer count, calculated billings, subscription revenue, and customers with more than $100,000 in annual contract value.
As the old saying goes, however, they can’t all be winners. A notable exception to today’s high-flying cloud and cyber market sentiment is customer relations management software provider Salesforce (NYSE: CRM). Even though Salesforce posted revenue and earnings beats, CRM stock dropped almost 10% as investors caught wind of the unexpected departure of co-CEO Bret Taylor. It also didn’t help that Salesforce issued fourth-quarter and full-year 2022 revenue guidance that lagged some investors’ expectations.
So, if the rule today is that software stocks are jumping after largely positive announcements, Salesforce is the notable exception to that rule. Overall, however, cloud and cyber stocks seem to be bucking the trend today, even as tech stocks generally struggle to pick a direction.
