Snowflake (SNOW) and Pure Storage (PSTG) surge on Thursday on strong earnings and AI tailwinds.
Snowflake Rides AI Demand to Strong Quarter
Snowflake delivered a standout second quarter, topping Wall Street estimates and raising its full-year outlook, sending shares up more than 14% in early trading. The cloud data platform reported adjusted earnings of $0.35 per share, well ahead of analyst expectations of $0.27, while revenue climbed 32% year-over-year to $1.14 billion.
A key highlight was product revenue of $1.09 billion, above forecasts, supported by growing enterprise adoption of Snowflake’s AI-powered offerings. The company added 48 new customers generating over $1 million in annual product revenue, bringing the total to 654 such accounts. Net revenue retention stood at a healthy 125%, signaling that existing customers are expanding their spending.
Management boosted full-year product revenue guidance to $4.4 billion, up from the prior $4.33 billion, reflecting stronger demand. CEO Sridhar Ramaswamy pointed to accelerating adoption of Snowflake’s AI tools, noting that over 6,100 accounts are now engaging weekly with the company’s AI capabilities.
Still, questions around valuation remain. While some models suggest Snowflake trades at a discount to its long-term cash flow potential, others flag its premium price-to-sales multiple as stretched compared to fundamentals. The stock has gained 30% in 2025 but remains volatile, underscoring both excitement and caution in the AI-driven rally.
Pure Storage Hits Record Highs with Meta Partnership
Pure Storage surged nearly 29% to an all-time high after posting stronger-than-expected earnings and raising its fiscal-year guidance. Revenue reached $861 million in the latest quarter, while net income jumped to $47.1 million. Management also completed a $390 million share buyback, signaling confidence in the company’s trajectory.
Investor enthusiasm centers on Pure Storage’s deepening partnership with Meta Platforms. The flash memory specialist is set to ship up to two exabytes of its DirectFlash technology to Meta by fiscal 2026, with additional shipments possible sooner. While revenue from Meta remains modest today, the relationship is expected to deliver sustainable 20% growth beginning in fiscal 2027, with margins expanding significantly in the years that follow.
Analysts praised the results, with Guggenheim calling it a “pivotal quarter” and maintaining a $93 price target. Evercore and Susquehanna also raised their targets, highlighting the potential for long-term growth as Pure Storage expands beyond Meta to other hyperscalers. Management noted that early-stage discussions with additional cloud giants are already underway.
Still, questions around valuation remain. While some models suggest Snowflake trades at a discount to its long-term cash flow potential, others flag its premium price-to-sales multiple as stretched compared to fundamentals. The stock has gained 30% in 2025 but remains volatile, underscoring both excitement and caution in the AI-driven rally.
Pure Storage Hits Record Highs with Meta Partnership
Pure Storage surged nearly 29% to an all-time high after posting stronger-than-expected earnings and raising its fiscal-year guidance. Revenue reached $861 million in the latest quarter, while net income jumped to $47.1 million. Management also completed a $390 million share buyback, signaling confidence in the company’s trajectory.
Investor enthusiasm centers on Pure Storage’s deepening partnership with Meta Platforms. The flash memory specialist is set to ship up to two exabytes of its DirectFlash technology to Meta by fiscal 2026, with additional shipments possible sooner. While revenue from Meta remains modest today, the relationship is expected to deliver sustainable 20% growth beginning in fiscal 2027, with margins expanding significantly in the years that follow.
Analysts praised the results, with Guggenheim calling it a “pivotal quarter” and maintaining a $93 price target. Evercore and Susquehanna also raised their targets, highlighting the potential for long-term growth as Pure Storage expands beyond Meta to other hyperscalers. Management noted that early-stage discussions with additional cloud giants are already underway.
AI Infrastructure Leaders Chart Different Paths
Both Snowflake and Pure Storage are benefiting from the surge in enterprise spending on artificial intelligence infrastructure, but their growth stories highlight different strengths. Snowflake is carving out its role as the data backbone for AI applications, with strong recurring revenue growth and an expanding customer base. Pure Storage, meanwhile, is capitalizing on demand for high-performance flash storage in AI supercomputing, with Meta as a key anchor client and other opportunities developing.
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Both Snowflake and Pure Storage are benefiting from the surge in enterprise spending on artificial intelligence infrastructure, but their growth stories highlight different strengths. Snowflake is carving out its role as the data backbone for AI applications, with strong recurring revenue growth and an expanding customer base. Pure Storage, meanwhile, is capitalizing on demand for high-performance flash storage in AI supercomputing, with Meta as a key anchor client and other opportunities developing.
Conclusion
The latest results from Snowflake and Pure Storage underscore the accelerating shift toward AI-driven enterprise technology. Snowflake’s strong quarter reflects rising adoption of its data cloud for AI workloads, while Pure Storage’s record rally is fueled by a high-profile partnership that could open doors to broader hyperscaler adoption. For investors, both stocks represent distinct but complementary plays on the AI buildout—one through the software and data layer, the other through hardware and storage infrastructure.
The latest results from Snowflake and Pure Storage underscore the accelerating shift toward AI-driven enterprise technology. Snowflake’s strong quarter reflects rising adoption of its data cloud for AI workloads, while Pure Storage’s record rally is fueled by a high-profile partnership that could open doors to broader hyperscaler adoption. For investors, both stocks represent distinct but complementary plays on the AI buildout—one through the software and data layer, the other through hardware and storage infrastructure.
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