Why Snowflake Stock Is Sinking After a Q2 Earnings Beat
Snowflake stock is lower Thursday even as the tech company disclosed a Q2 earnings beat and raised a key sales forecast. Here's what you need to know.


Snowflake (SNOW) stock is spiraling in Thursday's session even after the data cloud company beat top- and bottom-line expectations for its second quarter and raised its full-year product revenue forecast.
In the three months ended July 31, Snowflake's revenue increased 28.9% year-over-year to $868.8 million, thanks in part to a 30% surge in product revenue growth to $829.3 million. Its earnings per share (EPS) declined 18.2% from the year-ago period to 18 cents.
"Snowflake delivered another strong quarter, surpassing the high end of our Q2 product revenue guidance and, as a result, we're raising our product revenue guidance for the year," said Snowflake CEO Sridhar Ramaswamy in a statement. "The quarter was hallmarked by innovation and product delivery, and great traction in the early stages of our new artificial intelligence (AI) products."

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The results easily beat analysts' expectations. Wall Street was anticipating revenue of $851.3 million and earnings of 16 cents per share, according to Yahoo Finance.
As its CEO mentioned, Snowflake raised its product revenue guidance for the full year due to its strong performance in the second quarter. It now anticipates product revenue of approximately $3.356 billion in fiscal 2025, representing year-over-year growth of about 26%. This compares to its previous forecast of about $3.3 billion.
The company added that it continues to anticipate a product gross profit margin of 75%, an operating income margin of 3%, and an adjusted free cash flow margin of 26%.
For the third quarter, Snowflake said it anticipates product revenue in the range of $850 million to $855 million.
Analysts are anticipating product revenue of $851 million for its third quarter, according to Investor's Business Daily.
"With the combination of our platform, the network effect of collaboration and our AI innovations, we have a huge opportunity ahead to deliver even greater value to our customers," Ramaswamy said.
Lastly, Snowflake authorized an additional $2.5 billion in stock repurchases and extended the expiration of its repurchase program to March 2027. As of July 31, $491.9 million remained for repurchase under its previous $2 billion authorization. Stock buybacks can help boost the share price.
Despite all the positives, William Blair analyst Jason Ader says Wall Street could be worried that management maintained its Q3 and full-year operating margin guidance of 3% amid higher commissions and R&D costs.
Is Snowflake stock a buy, sell or hold?
Snowflake has performed poorly on the price charts in 2024, down 40% for the year to date. And while Berkshire Hathaway (BRK.B) threw in the towel on SNOW – it was one of the stocks Warren Buffett sold in Q2 – Wall Street remains bullish on the tech stock.
According to S&P Global Market Intelligence, the average analyst target price for SNOW stock is $172.86, representing implied upside of more than 45% to current levels. Meanwhile, the consensus recommendation is a Buy.
Financial services firm Oppenheimer is one of the more bullish outfits on SNOW stock with an Outperform rating (equivalent to a Buy) and a $180 price target.
There are several positives building for Snowflake that can drive improved growth its upcoming fiscal year, including improving execution and closing rates and leadership in serving analytical workloads and use cases, says Oppenheimer analyst Ittai Kidron.
However, the analyst notes that third-quarter product guidance was just in line with estimates and "investor concerns about competition and the company's execution in AI are likely to persist."
Related Content
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.
-
What Wall Street's CEOs Are Saying About Trump's Tariffs
We're in the thick of earnings season and corporate America has plenty to say about the Trump administration's trade policy.
By Karee Venema
-
The Role of the U.S. Dollar in Retirement: Is It Secure?
Protect your retirement from de-dollarization, because “capital always goes where it is treated best."
By Adam Shell
-
What Wall Street's CEOs Are Saying About Trump's Tariffs
We're in the thick of earnings season and corporate America has plenty to say about the Trump administration's trade policy.
By Karee Venema
-
To Stay on Track for Retirement, Consider Doing This
Writing down your retirement and income plan in an investment policy statement can help you resist letting a bear market upend your retirement.
By Matt Green, Investment Adviser Representative
-
How to Make Changing Interest Rates Work for Your Retirement
Higher (or lower) rates can be painful in some ways and helpful in others. The key is being prepared to take advantage of the situation.
By Phil Cooper
-
When to Sell Your Stock
Knowing when to sell a stock is a major decision investors must make. While there's no one correct answer, we look at some best practices here.
By Charles Lewis Sizemore, CFA
-
Within Five Years of Retirement? Five Things to Do Now
If you're retiring in the next five years, your to-do list should contain some financial planning and, according to current retirees, a few life goals, too.
By Evan T. Beach, CFP®, AWMA®
-
The Home Stretch: Seven Essential Steps for Pre-Retirees
The decade before retirement is the home stretch in the race to quit work — but there are crucial financial decisions to make before you reach the finish line.
By Mike Dullaghan, AIF®
-
Stock Market Today: Great Power Affairs Mesmerize Markets
The U.S. and China are at least talking about talking about tariffs, and investors, traders and speculators are showing a little less fear.
By David Dittman
-
Three Options for Retirees With Concentrated Stock Positions
If a significant chunk of your portfolio is tied up in a single stock, you'll need to make sure it won't disrupt your retirement and legacy goals. Here's how.
By Evan T. Beach, CFP®, AWMA®