Long SNOW due to its role as a key AI data layer; position held with a stop-loss in case of poor earnings results.

Snowflake earnings coming and well, all right. So, there's a bunch of earnings.

Josh before before we get into Snow, which is obviously your your beat, not mine. Snow the stock has performed exceptionally well as has Dell into the print.

Here's why I want to talk about snow. I bought the stock during the course of this quarter. Um I did not buy the low. That's not my my thing. That's not what I do. I buy breakouts.

And I got it. I nailed it. I'm still long. I am trailing it with a stop. If tomorrow night's report is apocalyptic, it's not going to bother me. I'll just I'll be out.

but I believe that snow has become on the DL one of the most important layers of the whole AI layer cake. The reason why we're previewing this name um is because the last time they reported, the stock [ __ ] exploded. It went up 38% the next day.

like literally came in, beat, raise guidance, and then and then put everybody on notice. Here's what's really going on. You want to do a gentic [ __ ] Congratulations. You're going to do it right here in the data warehouse.

You're not going to be duplicating data. You're not going to be moving your data around to all these platforms. The LLMs are going to come into the Snowflake environment and we this layer is going to be ground zero for the Agentic future.

They have they told us last time they have over 9,000 corporate customers utilizing Agentic workflows directly inside of Snowflake's uh uh data lake layer. So this is not like their idea like maybe we'll do this. They literally are doing it.

Snowflake's biggest competitor is Datab Bricks and Data Bricks is growing twice as fast. Data Bricks actually surpassed Snow on product revenue last quarter for the f Yes. Data Bricks is growing 65% versus Snow's growth rate is like 32%. They're growing twice as fast.

it's a battle between two different types of architecture. Snow is built on SQL SQL. These are rows and columns. This is like how most data structured data is uh lives in a lake.

And snow is the king in SQL. And the reason that's relevant is most large corporations that's how their data is structured.

So what who uses snowflake? Business analysts, business intelligence people at large companies. They interact with the SQL database that is hosted at snow.

what both platforms are doing is copying each other. So now you see data bricks trying to get more into SQL to sync up with all these companies and the way that they actually do things.

And conversely you see snow going more heavily into machine learning so that they can challenge data bricks for unstructured data.

Whereas the way corporations have been keeping data for a million years, that's SQL and that's where snow is the king. this stock is up 164% from the April low. It very much got caught up just like CrowdStrike, which I also own, and many other software names in the SAS apocalypse this spring.

And obviously when they put that earnings report out in May, they put an end to that [ __ ] fast. The stock again the day after they reported ripped almost 40% uh the best earnings reaction since it came public.

And unlike many stocks that do the shooting star thing, it gave almost nothing back. It continued to ramp. And that is such a powerful signal for for um investors.

The the consensus for this quarter, product revenue 1.48 billion, that would be 30% year-over-year growth. Obviously, any upside on that we know will be treated favorably. Adjusted earnings 45 cents up from 35 cents a year ago.

there's a really wide gap between where the street is and what the company's own guidance is, which I find interesting. So, I just told you the consensus is 1.48. Snowflake's own guidance after that Q1 report is only 1.03 billion.

So, the street is like half a billion dollars ahead of the company's guidance.

they beat by 300 million last quarter. So, management definitely sandbagged.

the question is that AI inflection that we saw last quarter was that a one- hit wonder or is that part of a new so I the company would say no you don't understand we have now made the case to our customers that they can do the AI workflows and the agentic stuff right here on our platform we're inflecting so that's a a big open question

the guy running this company Ramaswami formerly ran Google search this is like a this is a real guy that they brought in to replace Frank Slutman who was the CEO when they went public.

They used to call this the Cortex co-pilot but all the customers say Coco so they actually have changed the name. Um this is the key to the growth strategy going forward. This is the AI inference layer that lets enterprises run LLM and Agentic workflows directly with Snowflake data rather than sending it out to an external um provider.

There's an analyst at RBC who specifically flagged Coco as showing positive and accelerating momentum ahead of the print. The Snowflake Summit in June, that's like their user conference, was heavily Cococentric and according to the analyst um a lot of the product launches and a lot of the conversation um was was about continued momentum here.

They had a massive announcement with Amazon Web Services, a $6 billion commitment, but that's Snowflake spending at Amazon. So, that's not a revenue deal for Snowflake, but they would not have made that commitment if they didn't need the compute is the way that the street took it.

So, the stock actually rallied on that announcement.

higher bar. Again, the stock's up huge from its April lows. Um the average analyst price target is 317 which is actually lower than where it trades. Even though there are some targets much much higher the average most analysts did not automatically come in at 400 because they had a great quarter um last time.

Last thing the net revenue retention of 126% is very healthy for a software stock but it's not accelerating. So the bearish argument is well if AI upsells are working as strongly as all these product announcements suggest why isn't the net revenue retention.

So that's like um xing out the churn. So it's growth of existing customers and new customers netting out any customers that have left. Why isn't that a higher number? If that number is 130% or better.

So this is how you look at a SAS company's progress. Um, that's I think that's gonna be upside for for the stock.

The high target on the street looks like it's Jeff at 385. So that's not like crazy upside from here. And again, a lot of the analysts are clustering just below where where it's currently trading.

What are your thoughts on the importance of this story to the overall AI story and just seeing a software company completely jailbreak itself out of that whole SAS apocalypse um conversation?

Snowflake. Obviously, you know a lot more than I do, but I do love that this was one of the inflection points for software I do love that this was one of the inflection points for software where everybody said, "All right, AI is not going to be all things to all people. you actually can't do what you can do with companies like these.