After a sluggish start to the month, investors appeared to be returning to a risk-on mentality on Wednesday, which caused shares of Snowflake (NYSE:SNOW) to surge about 6%. This led to higher prices for companies in the cloud computing industry overall.
One day after investment firm BTIG downgraded the data storage company, Snowflake (SNOW), led by Frank Slootman, added 5.5% to $161.75, reaching a new all-time high. BTIG cited a decline in recent field checks as the reason for the downgrade.
The reduction was partly because cloud hyperscalers like Microsoft (NASDAQ:MSFT), Amazon (AMZN), and Google (GOOG) (GOOGL) saw their growth slow down during the second quarter.
Analyst Gray Powell changed his rating on Snowflake (SNOW) from buy to neutral, stating that client spending intentions are still “strong” but not as good as they were six to twelve months ago. As a result of this observation, the analyst cut his recommendation on Snowflake (SNOW).
He also mentioned that to reduce their expenses, some clients would consider shifting their expenditure to competitors like Databricks.
Shares of Datadog (NASDAQ:DDOG) have increased by roughly 5% as investors wait for the firm to release its results for tomorrow’s second quarter.
The consensus forecast among financial experts is that Datadog (DDOG) will post earnings of $0.15 per share on revenue of $381.28 million, representing a year-over-year increase of 63.3%.
Datadog had previously projected that its sales would be between $376 million and $380 million, with non-GAAP operating income between $49 million and $53 million and non-GAAP earnings per share between $0.13 and $0.15.
On Wednesday, the number of other software stocks increased in price, including Microsoft (MSFT), Workday (NASDAQ:WDAY), Adobe (ADBE), and Intuit (INTU), all of which gained at least 1.5%.
In addition, monday.com (MNDY), Salesforce (CRM), and Oracle (ORCL) all posted gains, with monday.com’s increase of 10% being the largest of the group.
A month ago, the financial services company Baird began providing coverage on Snowflake (SNOW), referring to the company as a pioneer in “next-generation data.”
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