When asked to guess which stock ranks #1 on the 2023 Fortune Future 50artificial intelligence powers like Nvidia (NVDA), Microsoft (MSFT) And Alphabet (GOOGLE) might come to mind. But data warehousing and AI stock Snowflake (SNOW) is the one who deserves this distinction. And after generating 127% profit growth last quarter, SNOW stock is looking at a breakout on the horizon.
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Accepting the honor of being named to the top of the Future 50, Snowflake Senior Vice President of AI Sridhar Ramaswamy said that “in this new era of AI, generative AI and large language models will reshape the way we live, work and do business,” in the company’s release. release. Ramaswamy further noted that “there is no AI strategy without a data strategy.”
Snowflake’s focus on applying machine learning and AI to its Data cloud The platform fits perfectly into the AI boom, like snowflakes in winter. Snowflake’s single platform, Data Cloud simplifies sharing, collaboration and monetization of thousands of data sets, services and entire data applications.
Compiled in collaboration with consulting firm BCG, the latest annual Fortune Future 50 rankings were compiled after examining more than 1,000 publicly traded companies with at least $20 billion in market value or $10 billion in revenue. business in 2022. In terms of methodology, 30% of a company’s score is based on market potential. The remaining 70% comes from the company’s ability to realize this potential.
Other names in the Top 10 Future 50 include Data Dog (DOG), Crowd strike (CRUD) And Cloud Flare (NET).
Snowflake stock in demand among A+ funds
After an early increase following its 2020 Initial Public OfferingSnowflake began to melt, falling into a years-long slump.
But bounce back institutional demandSpurred by a sharp turnaround in earnings growth in recent quarters, SNOW stock is closing in on a new buy point.
The prior year quarters showed a loss for Snowflake. But the company reported several quarters of triple-digit or higher profit growth in fiscal 2023. On Nov. 29, Snowflake reported earnings of 25 cents per share for the third quarter of fiscal 2024, which ended on October 31. This marked a year of 127%. -gain over the year.
Wall Street projects a 42% gain to earnings of $1.12 per share in fiscal 2025.
In the fiscal third quarter, Snowflake reported revenue of $732.4 million. Sales growth has slowed for at least eight consecutive quarters. Still, the AI cloud game showed a 32% revenue gain in its latest report.
Unlike Datadog’s enterprise software, Salesforce.com (RCMP), Working day (WDAY), Shopify (SHOP) And Palantir (PLTR), Snowflake did not appear in the latest list of new purchases by top mutual fundswhich comes out Friday.
But 70 funds rated A+ or A by IBD have a position in SNOW stock. In addition, a B+ Accumulation/distribution rate and 1.4 high/low volume ratio show clear demand for Snowflake shares.
SNOW Stock Aims for a Holiday Escape
Stocks from Magnificent Seven, Microsoft and Nvidia are testing support. Meanwhile, Google stock is looking for its 50-day moving average. But SNOW stock appears to be ending the year with a breakout.
Building on a five-week run of gains starting last month, Snowflake is now targeting 193.94. point of purchase.
It is line of relative force has soared in recent weeks, surpassing the trajectories of NVDA, GOOGL and NVDA.
Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.
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