Snowflake shares rise on rosy outlook and AI deal with Anthropic

(Reuters) – Snowflake shares rose more than 28% on Thursday after the data analytics provider raised its full-year product revenue forecast, signaling growing demand for cloud data storage and analytics.

The company, whose shares are down 35% this year, is having its best day since going public in 2020.

If earnings continue, its value would increase by more than $12 billion to a market capitalization of $43.3 billion.

The Bozeman, Montana-based company’s results come months after Sridhar Ramaswamy took over as CEO, having previously led Snowflake’s artificial intelligence strategy as senior vice president of artificial intelligence, and analysts have been watching progress since then the company’s artificial intelligence efforts under new leadership.

On Wednesday, Snowflake announced a partnership with Anthropic that will enable its customers to enhance their artificial intelligence applications by leveraging Anthropic’s large language models on Snowflake’s cloud data platforms.

The multi-year agreement will also allow Snowflake’s AI agents to analyze data and create visualizations, among other functions, the company said.

The company expects product revenue to be $3.43 billion in 2025, up from the previous forecast of $3.36 billion.

“The macroeconomic environment does not appear to have improved significantly, but improving sales and new product sales momentum are helping Snowflake achieve its results,” Barclays analysts wrote in a note.

At least 20 analysts have upgraded their PT on the stock, while at least three have upgraded their ratings on the stock. The average forecast was $185, which means an upside of 43.3%.

The company’s shares traded at 147.32 times expected 12-month forward earnings, compared with Datadog’s 67.01 and MongoDB’s 91.04.

(Reporting by Priyanka.G and Akash Sriram in Bengaluru; Editing by Tasim Zahid)