With cloud computing stock Snowflake (NASDAQ:SNOW) expected to deliver its third-quarter numbers in a week’s time, analysts are already wondering what they’ll get out of the results. Investors, however, seem pretty upbeat about those upcoming announcements, as they pushed shares up nearly 2.5% in Wednesday afternoon’s trading.
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The word from Robert W. Baird, via analyst William Power, suggests that Snowflake will deliver “solid” numbers. However, decent-quality numbers, potentially even high-quality numbers, might prove overshadowed by two key fronts: any developments in artificial intelligence and the overall macroeconomic picture.
Power isn’t looking for high-quality numbers, however, but rather a “…modest upside to fiscal third-quarter results…” as well as “…Fiscal Year 2024 guidance with the focus on macro and optimization impacts.” Power further noted that the consensus projections for Fiscal Year 2025 may prove to be too high, but that won’t be clear until next year.
Snowflake Has Had a Substantial Number of Developments Lately
Snowflake has had a substantial number of developments as of late, too. Just last month, it showed off Cortex, a service that gives users the ability to develop large language models (LLMs) for use in AI operations. They can not only build their own apps but also take advantage of currently existing models to help analyze data and drive development. That’s a pretty exciting development in and of itself and helps Snowflake branch out from being merely a cloud computing operation. However, if the macro environment slows significantly, businesses may pitch into survival operations and stay out of development for a while. That will ultimately hurt Snowflake’s returns, if only in the short term.
Is SNOW a Good Stock to Buy Now?
Turning to Wall Street, analysts have a Strong Buy consensus rating on SNOW stock based on 22 Buys and five Holds assigned in the past three months, as indicated by the graphic below. After a 16.77% rally in its share price over the past year, the average SNOW price target of $193.65 per share implies 13.24% upside potential.
