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Snowflake Shares Up on Upbeat Guidance: ETFs to Benefit
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Software solutions provider Snowflake (SNOW - Free Report) reported a moderate start to the fiscal year with first-quarter revenue topping expectations. Although the company missed on earnings estimate, upbeat guidance sent shares up by 4.4% in after hours on May 22, 2024.
This puts focus on Snowflake-heavy ETFs likeSpear Alpha ETF (SPRX - Free Report) , TrueShares Technology, AI & Deep Learning ETF (LRNZ - Free Report) and Global X Cloud Computing ETF (CLOU - Free Report) . The cloud-based data warehousing company announced that its revenue for the quarter was $828.7 million, marking a 33% increase from the same period last year. It beat the Zacks Consensus estimate by 5.31%.
The company's adjusted earnings per share came in at $0.14, which was $0.04 below the Zacks Consensus estimate of $0.17. Despite the EPS miss, investors focused on the company's robust revenue performance, which was driven by a 34% year-over-year growth in product revenue, totaling nearly $790 million.
The company guided for Q2 product revenue in the region of $805-810 million, representing 26-27% year-over-year growth. For 2025, Snowflake expects product revenue at $3.30 billion, up from a prior forecast of $3.25 billion. Snowflake's net revenue retention rate stood at 128% in Q1, indicating strong customer satisfaction.
There's a noticeable shift among companies from conventional methods towards cloud-based solutions. This transition aims to blend digital technologies with more efficient processes while cutting costs. Consequently, firms specializing in cloud-related services like Snowflake are experiencing significant benefits from this trend.
The stock Snowflake has a Zacks Rank #2 (Buy). The stock has an upbeat good growth score of “A.” before the release of the earnings, the average price target for Snowflake Inc. was $205.46, based on short-term price targets offered by 37 analysts. The forecasts range from a low of $105.00 to a high of $240.00. The average price target represents an increase of 25.78% from the last closing price of $163.34.
ETFs in Focus
Against this backdrop, below we highlight a few ETFs that have a decent exposure to Snowflake and may benefit in the near term, if Snowflake rises further on AI push.
This is another fund which is set to benefit from breakthrough trends in industrial technology. The fund invests on the theme of enterprise digitalization, automation & robotics, AI, environmental focus and decarbonization, photonics and additive manufacturing and space exploration. The fund is heavy on companies like Nvidia, AMD and Snowflake – all are big AI beneficiaries.
TrueShares Technology, AI & Deep Learning ETF (LRNZ - Free Report) – Snowflake has 5.10% weight
The ETF is an actively-managed exchange-traded fund that seeks total return by investing in companies that have a competitive advantage with respect to the development and utilization of artificial intelligence, machine learning, or other deep learning technologies.
Global X Cloud Computing ETF (CLOU - Free Report) – Snowflake has 4.06% weight
The underlying Indxx Global Cloud Computing Index provides exposure to exchange-listed companies in developed and emerging markets that are positioned to benefit from the increased adoption of cloud computing technology.
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Snowflake Shares Up on Upbeat Guidance: ETFs to Benefit
Software solutions provider Snowflake (SNOW - Free Report) reported a moderate start to the fiscal year with first-quarter revenue topping expectations. Although the company missed on earnings estimate, upbeat guidance sent shares up by 4.4% in after hours on May 22, 2024.
This puts focus on Snowflake-heavy ETFs likeSpear Alpha ETF (SPRX - Free Report) , TrueShares Technology, AI & Deep Learning ETF (LRNZ - Free Report) and Global X Cloud Computing ETF (CLOU - Free Report) . The cloud-based data warehousing company announced that its revenue for the quarter was $828.7 million, marking a 33% increase from the same period last year. It beat the Zacks Consensus estimate by 5.31%.
The company's adjusted earnings per share came in at $0.14, which was $0.04 below the Zacks Consensus estimate of $0.17. Despite the EPS miss, investors focused on the company's robust revenue performance, which was driven by a 34% year-over-year growth in product revenue, totaling nearly $790 million.
The company guided for Q2 product revenue in the region of $805-810 million, representing 26-27% year-over-year growth. For 2025, Snowflake expects product revenue at $3.30 billion, up from a prior forecast of $3.25 billion. Snowflake's net revenue retention rate stood at 128% in Q1, indicating strong customer satisfaction.
There's a noticeable shift among companies from conventional methods towards cloud-based solutions. This transition aims to blend digital technologies with more efficient processes while cutting costs. Consequently, firms specializing in cloud-related services like Snowflake are experiencing significant benefits from this trend.
The stock Snowflake has a Zacks Rank #2 (Buy). The stock has an upbeat good growth score of “A.” before the release of the earnings, the average price target for Snowflake Inc. was $205.46, based on short-term price targets offered by 37 analysts. The forecasts range from a low of $105.00 to a high of $240.00. The average price target represents an increase of 25.78% from the last closing price of $163.34.
ETFs in Focus
Against this backdrop, below we highlight a few ETFs that have a decent exposure to Snowflake and may benefit in the near term, if Snowflake rises further on AI push.
Spear Alpha ETF (SPRX - Free Report) – Snowflake has 7.28% weight
This is another fund which is set to benefit from breakthrough trends in industrial technology. The fund invests on the theme of enterprise digitalization, automation & robotics, AI, environmental focus and decarbonization, photonics and additive manufacturing and space exploration. The fund is heavy on companies like Nvidia, AMD and Snowflake – all are big AI beneficiaries.
TrueShares Technology, AI & Deep Learning ETF (LRNZ - Free Report) – Snowflake has 5.10% weight
The ETF is an actively-managed exchange-traded fund that seeks total return by investing in companies that have a competitive advantage with respect to the development and utilization of artificial intelligence, machine learning, or other deep learning technologies.
Global X Cloud Computing ETF (CLOU - Free Report) – Snowflake has 4.06% weight
The underlying Indxx Global Cloud Computing Index provides exposure to exchange-listed companies in developed and emerging markets that are positioned to benefit from the increased adoption of cloud computing technology.