Snowflake lifts product revenue forecast, enters AI deal with Anthropic
6:21 pm Wednesday, November 20th, 2024
(Reuters) -Data analytics provider Snowflake on Wednesday raised its annual product revenue forecast and said it has teamed up with AI firm Anthropic to build up its cloud services, sending its shares surging around 19% in extended trading.
Snowflake’s data cloud has been seeing strong adoption from enterprises looking to use artificial intelligence-powered services to organize swathes of data.
Like other tech firms such as Salesforce and Microsoft, Snowflake is also developing AI agents using its Snowflake Intelligence platform. Autonomous agents are considered to be the evolution of a copilot, which can perform routine tasks on behalf of a person.
The company’s multi-year partnership with Anthropic would allow its customers to use the AI firm’s large language models to develop and enhance their own AI applications.
With Anthropic’s technology, Snowflake’s AI agents will be able to deeply analyze data and generate visualizations, among other functions.
“Our partnership with Snowflake enables enterprises of any size and industry to access our most advanced models within their secure data environment,” said Michael Gerstenhaber, vice-president of product at Anthropic.
Analysts have also been watching how Snowflake’s new CEO can pivot it into an AI software firm that can leverage the booming technology amid stiff competition.
Snowflake expects product revenue of $3.43 billion for 2025, compared with its previous forecast of $3.36 billion.
The company forecast its fourth-quarter product revenue to be between $906 million and $911 million, above analysts’ estimate of $884.5 million, according to data compiled by LSEG.
Total revenue for the third quarter was $942.1 million, surpassing estimates of $897 million. Quarterly product revenue of $900.3 million also beat expectations.
On an adjusted basis, the company earned 20 cents per share, compared with the estimates of 15 cents.
(Reporting by Zaheer Kachwala in Bengaluru; Editing by Shilpi Majumdar)
