What's Behind This AI Stock's 14.7% Drop Despite Q2 Earnings Beat?

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Berkshire Hathaway B News

Berkshire Hathaway Inc Class A,Snowflake Inc

Stocks Analysis by ValueWalk (Dave Kovaleski) covering: Berkshire Hathaway B, Berkshire Hathaway Inc Class A, Snowflake Inc. Read ValueWalk (Dave Kovaleski)'s latest article on Investing.com

Snowflake stock was down about 13% on Thursday after reporting Q2 earnings.Should investors buy Snowflake stock on the dip?

The company had a $318 million net loss in the quarter, which was worse than the $227 million net loss in Q2 of 2023. On a non-GAAP adjusted basis, it managed $63.8 million in net income, or 19 cents per share, down 12% year-over-year. Analysts had estimated 16 cents per share in adjusted earnings.Snowflake provides its customers with a cloud data warehouse, where they can store their data on a single platform, minus the silos.

Snowflake stock is down 13% since Q2 earnings came out Wednesday, and is down 32% year-to-date. Since it went public, Snowflake has an average annualized return of -17%. It has also been dealing with negative press from a cyberattack back in May that led to a breach of some its corporate clients’ data.

Snowflake guided for a 3% operating income margin for Q3 and the full fiscal year, which would be down from a 5% margin in Q2, suggesting that the company is continuing to struggle with expense management.

 

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