By Akash Sriram
(Reuters) -Snowflake shares jumped about 14% on Thursday riding a wave of demand for its artificial intelligence database products, as companies race to modernize their data infrastructure and simplify AI adoption.
The stock move is set to add more than $11 billion to its $67 billion market capitalization, if premarket gains hold.
The cloud-based data warehousing firm, which helps enterprises store, manage and analyze massive datasets across multiple cloud providers, said demand for its platform is accelerating.
Nvidia’s strong forecast boosted confidence in the AI sector and pointed to sustained spending on data infrastructure, a trend that positions Snowflake to benefit as companies accelerate efforts to modernize data stacks and deploy AI.
Investors see Snowflake as a key beneficiary of the AI-driven shift to the cloud.
“That’s a catalyst for new next generation databases, whether that be MongoDB, whether that be Snowflake, whether that be Databricks,” said Richard Clode, portfolio manager at Janus Henderson Investors, which owns Snowflake shares.
The company highlighted strong momentum on Microsoft’s Azure cloud service, with usage surging in Europe, the Middle East and Africa.
Snowflake’s stock, which is up about 30% this year, trades at 142.52 times profit estimates, while shares of rivals MongoDB and Datadog have a price-to-earnings multiple of 75.76 and 63.71, respectively.
(Reporting by Akash Sriram in Bengaluru; Editing by Shailesh Kuber)
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