Core Viewpoint - Snowflake is set to report its Q1 earnings on May 21, with analysts predicting a 57.1% year-over-year increase in EPS to $0.22 and a 21.1% increase in revenue to $1 billion [1] Group 1: Financial Performance and Analyst Predictions - Snowflake's stock has rebounded over 40% since the low point after the tariff "liberation day," benefiting from easing global trade tensions [1] - Analysts maintain a bullish outlook, with most rating the stock as "buy" and expecting continued strong growth [1] - Mizuho analyst Gregg Moskowitz raised the target price from $190 to $205, citing strong industry growth and potential for further stock price appreciation [1][2] Group 2: Competitive Landscape and Concerns - Despite the positive outlook, concerns have been raised about Snowflake's business execution and competitive pressures, with a top investor warning that current valuations may not be sustainable [2][3] - The investor highlighted a decline in net revenue retention and the risk of reduced contract renewals due to a less attractive usage-based revenue model [3] - Major cloud competitors like Microsoft, Amazon AWS, and Google are increasingly encroaching on Snowflake's market share, raising concerns about its competitive position [3] Group 3: Market Sentiment - Overall, Wall Street remains optimistic, with a consensus of 32 "buy" and 6 "hold" ratings, indicating a strong buy sentiment [3] - The 12-month target price of $203.69 suggests potential for double-digit upside [3]

Group 1 - The account is managed by Noah's Arc Capital Management, focusing on providing Wall Street-level insights to main street investors [1] - The research primarily targets 20th-century stocks undergoing transformation in the 21st century, while also covering companies that facilitate these transformations [1] - The emphasis is on identifying innovations in business models that could lead to significant stock price changes [1] Group 2 - Noah Cox is the managing partner of Noah's Arc Capital Management, and his views may not necessarily reflect those of the firm [3] - The content is intended solely for informational purposes and does not constitute investment advice [3]

Group 1 - Snowflake Inc. (SNOW) is expected to report quarterly earnings of $0.22 per share, a 57.1% increase year-over-year, with revenues projected at $1 billion, reflecting a 21.1% year-over-year growth [1] - The consensus EPS estimate has remained unchanged over the last 30 days, indicating analysts have collectively reassessed their initial estimates [1] - Analysts predict 'Revenue- Product revenue' will reach $934.50 million, showing an 18.4% year-over-year increase [3] Group 2 - 'Revenue- Professional services and other revenue' is forecasted to be $44.56 million, representing a 13.9% increase from the prior-year quarter [4] - 'Remaining performance obligations' are expected to reach $6.55 billion, up from $5 billion in the same quarter last year [4] - The total number of customers is projected to be 11,485, compared to 9,822 a year ago [4] Group 3 - The number of 'Customers with trailing 12-month product revenue greater than $1 million' is expected to be 603, an increase from 485 in the same quarter last year [5] - The consensus estimate for 'GAAP Product gross profit' is $678.55 million, compared to $569.93 million in the same quarter of the previous year [5] - Over the past month, shares of Snowflake have increased by 27.6%, outperforming the Zacks S&P 500 composite's 9.8% change [5]

Core Viewpoint - Snowflake (SNOW) and Datadog (DDOG) are significant players in the cloud computing sector, focusing on data analytics and observability solutions, respectively [1][2]. Industry Overview - The global cloud computing market was valued at $752.44 billion in 2024 and is projected to grow at a CAGR of 20.4% from 2025 to 2030, presenting substantial growth opportunities for both SNOW and DDOG [2]. Snowflake (SNOW) Analysis - SNOW has a net revenue retention rate of 126% as of January 31, 2025, indicating strong platform adoption and usage [3]. - The number of customers generating over $1 million in revenue increased from 455 to 580 between January 31, 2024, and January 31, 2025 [3]. - SNOW's customer base grew from 9,384 to 11,159 in the same period, with 745 customers from the Forbes Global 2000 contributing to 45% of its fiscal 2025 revenues of $3.6 billion, a 29% increase from fiscal 2024 [4]. - In April 2025, SNOW enhanced its AI Data Cloud by integrating capabilities with Apache Iceberg tables, improving query performance and data sharing [5]. - SNOW expanded its AI Data Cloud with automotive-specific solutions in May 2025, driving digital transformation and AI innovation [6]. Datadog (DDOG) Analysis - DDOG reported 3,770 customers with an annual run rate (ARR) of $100,000 or more in Q1 2025, up from approximately 3,340 in the previous year, accounting for 88% of total ARR [7]. - New products like Flex Logs and Database Monitoring quickly achieved $50 million in ARR in Q1 2025, indicating strong demand for advanced log management [8]. - DDOG's acquisitions, including Eppo and Metaplane, are enhancing its product offerings and capabilities in observability and data quality [9][10]. Performance Comparison - Year-to-date, SNOW shares have increased by 18.2%, while DDOG shares have decreased by 17.6%, attributed to macroeconomic challenges and rising expenses for DDOG [11]. - Both companies are currently considered overvalued, with SNOW trading at a forward Price/Sales ratio of 12.71X compared to DDOG's 11.89X [14]. Earnings Estimates - The Zacks Consensus Estimate for SNOW's fiscal 2026 earnings is $1.15 per share, reflecting a 38.55% year-over-year increase [16]. - The Zacks Consensus Estimate for DDOG's 2025 earnings is $1.69 per share, indicating a 7.14% year-over-year decrease [16]. Conclusion - Both SNOW and DDOG present strong growth prospects in the cloud market, but SNOW's robust portfolio and client base make it more attractive for long-term investors, while DDOG faces margin pressures and slower earnings growth [17].

Core Insights - Snowflake Inc.'s stock is currently approximately 3% lower than its price on February 6, indicating short-term volatility [1] - The analysis emphasizes the importance of focusing on high-quality companies with reasonable valuations rather than seeking deep discounts [1] Company Analysis - The investor's approach combines hands-on experience with an academic background in corporate finance, highlighting a focus on long-duration growth opportunities [1] - The analysis prioritizes fundamental business and strategic perspectives, alongside financial performance and intrinsic value assessment [1] - The investor advocates for a balanced portfolio that includes both growth opportunities and low-volatility dividend-paying stocks [1] Investment Philosophy - The investor seeks high-quality names that have the potential for exponential share price growth over the long term, rather than only established companies [1] - There is a caution against investing in excessively cheap stocks, as they may have underlying issues that warrant avoidance [1]

Market Capitalization Changes - Tesla's market capitalization increased by 6.75% to $1,025.4 billion [3] - TSMC's market capitalization rose by 5.93% to $969.7 billion [3] - Tencent's market capitalization grew by 4.66% to $609.8 billion [3] - Netflix's market capitalization decreased by 2.65% to $472.3 billion [3] - Oracle's market capitalization increased by 4.58% to $440.8 billion [3] Notable Performers - Shopify saw a significant increase of 13.7% in market capitalization, reaching $136.2 billion [4] - AppLovin experienced a remarkable rise of 89% to $1.177 billion [4] - AMD's market capitalization increased by 5.13% to $175.3 billion [5] - Uber's market capitalization rose by 6.39% to $184.2 billion [5] Decliners - Pinduoduo's market capitalization fell by 6.14% to $165.2 billion [4] - Xiaomi's market capitalization decreased by 2.11% to $163.4 billion [4] - Spotify's market capitalization declined by 4.23% to $127.3 billion [4] Other Companies of Interest - Adobe's market capitalization increased by 3.3% to $168.7 billion [4] - Qualcomm's market capitalization rose by 4.78% to $167.0 billion [4] - Intel's market capitalization increased by 3.55% to $96.7 billion [5] - Airbnb's market capitalization grew by 5.64% to $828 million [5]

Investment Rating - The report does not explicitly provide an investment rating for the industry or specific companies covered. Core Insights - The report highlights the global distribution of enterprise software spending, indicating that the US accounts for approximately 56% of sales, with Western Europe at 23% in CY24, showing minimal change from CY20 [15] - The exposure of software and cloud companies to China is relatively low, with the report suggesting that tariffs or actions on software will not have a significant impact [14][12] - The report expresses concerns about deglobalization, noting that regions like the EU may attempt to promote local software industries through regulations and tariffs [14][12] Summary by Sections Global Exposure of Enterprise Software - Enterprise software spending has remained stable globally from CY20 to CY24, with most companies generating more revenue outside North America [2] - The US market is the largest revenue driver for most companies, except for SAP, which has similar revenue exposure in Western Europe and North America [14][12] Microsoft and Oracle Exposure - Microsoft has a 22% exposure to Western Europe and 11% to Asia/Pacific, with China accounting for only 1.8% of Azure revenue [22][28] - Oracle's global exposure mirrors that of enterprise software, with 21% in Western Europe and 10% in Asia/Pacific [33][35] SAP and Adobe Global Presence - SAP has equal revenue exposure to the US and Western Europe, with 37% in North America and 37% in Western Europe [40][41] - Adobe has become more global over the past four years, with a revenue mix of 56% in North America and 23% in Western Europe by CY24 [42][45] Salesforce and Workday International Growth - Salesforce has increased its international revenue percentage from CY20 to CY24, now at 64% in North America and 20% in Western Europe [46][48] - Workday remains predominantly North American, generating 77% of its revenue in North America in CY24, although it is working to expand its international presence [51][54]

Core Insights - The demand for artificial intelligence (AI) applications remains strong despite macroeconomic uncertainties [1] - Companies like Meta Platforms and Microsoft are increasing their investments in AI infrastructure and solutions [2] - Snowflake is expected to report solid results due to its growing AI offerings and customer adoption [3] Company Performance - Snowflake's AI solutions are gaining traction, with over 4,000 customers using its AI and machine learning technology weekly [5] - The company's remaining performance obligations (RPO) increased by 33% year-over-year to $6.9 billion, indicating a strong revenue pipeline [6] - Snowflake's customer base grew by nearly 19% year-over-year, with a net revenue retention rate of 126% [7] Market Potential - Snowflake anticipates its total addressable market (TAM) to reach $342 billion by 2028, suggesting significant growth opportunities [8] - The company is projected to achieve a 40% increase in its bottom line in fiscal 2026, with sustained earnings growth rates of over 35% in the coming years [10][12] Investment Outlook - Snowflake's stock has a median price target of $201, indicating a potential 20% increase in the next year [9] - The upcoming earnings report is expected to bolster investor confidence, potentially leading to further stock price gains [13]

Core Viewpoint - Snowflake (SNOW) is considered to be significantly overvalued based on reverse DCF analysis, indicating a potential mispricing in the market [1]. Group 1: Company Analysis - Companies that are secularly enabled with a history of strong execution and optimized capital allocation are rare to find at fair or below fair value [1]. - Long-term investors in Snowflake may face challenges due to its current valuation [1]. Group 2: Investment Strategy - The focus is on a buy-and-hold strategy primarily in technology stocks, reflecting a long-term investment approach [1].

Core Viewpoint - Snowflake (SNOW) has demonstrated significant stock performance, with a 32.9% increase over the past six months, contrasting with declines in the broader Computer and Technology sector and the Internet Software industry [1] Customer Growth and Revenue - As of January 31, 2025, Snowflake's customer base grew to 11,159 from 9,384 a year prior, with 745 of these being part of the Forbes Global 2000, contributing to 45% of fiscal 2025 revenues of $3.6 billion, which is a 29% increase from fiscal 2024 [2] - The net revenue retention rate stands at 126% as of January 31, 2025, with the number of customers generating over $1 million in trailing 12-month product revenue rising from 455 to 580 [3] Product and Technology Advancements - Snowflake's expanding product portfolio, including offerings like Apache Iceberg and Hybrid tables, has been instrumental in attracting new clients [6] - In April 2025, Snowflake enhanced its AI Data Cloud by integrating core capabilities with Apache Iceberg tables, improving query performance and security [7] - The introduction of Cortex AI and its integration with models from OpenAI and Anthropic has led to increased customer engagement, with over 4,000 customers utilizing Snowflake's AI and ML technology weekly [8] Strategic Partnerships - Snowflake's partnerships with major companies such as Microsoft, Amazon, and NVIDIA have significantly contributed to its growth [9] - An expanded partnership with Microsoft announced in April 2025 aims to integrate OpenAI's models into Snowflake Cortex AI, enhancing productivity through AI-driven insights [10] - The collaboration with NVIDIA allows businesses to create customized AI data applications, improving AI performance [11] - The partnership with Amazon Web Services (AWS) has been expanded to enhance customer-focused innovation and deepen product integrations, serving over 6,000 joint customers [12] - Snowflake achieved Department of Defense (DoD) Impact Level 5 Provisional Authorization on AWS GovCloud US-West, enabling secure solutions for handling Controlled Unclassified Information [13] Financial Guidance - For Q1 fiscal 2026, Snowflake anticipates product revenues between $955 million and $960 million, reflecting a year-over-year growth of 21% to 22% [14] - The fiscal 2026 product revenue forecast is set to increase by 30% from fiscal 2025 to $3.46 billion [14] - The Zacks Consensus Estimate for Q1 fiscal 2026 revenues is $1 billion, indicating a 21.13% year-over-year growth, with earnings expected to rise by 57.14% [15] - The fiscal 2026 revenue estimate stands at $4.44 billion, suggesting a year-over-year growth of 22.47%, with earnings projected to increase by 38.55% [16] Valuation and Investment Outlook - Snowflake shares are currently trading at a premium, with a forward 12-month Price/Sales ratio of 11.2X compared to the industry average of 4.86X [17] - Despite the premium valuation, the company's strong portfolio and expanding partner base support its growth prospects, justifying the current stock price [19]