Why Wolfspeed Shares Are Trading Higher By Around 8%; Here Are 20 Stocks Moving Premarket
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Aug 22 2024
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Source: Benzinga
Wolfspeed Financial Results: Wolfspeed, Inc. shares rose 8.2% to $14.62 in pre-market trading despite reporting a quarterly loss of 89 cents per share and missing revenue estimates for both the quarter and fiscal year.
Pre-Market Stock Movements: Several stocks experienced significant movements in pre-market trading, with Staffing 360 Solutions rising 113.5% and Revelation Biosciences falling 30.6%, among other notable gainers and losers.
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Analyst Views on SNOW
Wall Street analysts forecast SNOW stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for SNOW is 285.29 USD with a low forecast of 237.00 USD and a high forecast of 325.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
34 Analyst Rating
32 Buy
2 Hold
0 Sell
Strong Buy
Current: 199.370
Low
237.00
Averages
285.29
High
325.00
Current: 199.370
Low
237.00
Averages
285.29
High
325.00
About SNOW
Snowflake Inc. is a data cloud and artificial intelligence company. Its platform is the technology that powers the AI Data Cloud, enabling customers to consolidate data into a single source of truth to drive meaningful insights, apply artificial intelligence (AI) to solve business problems, build data applications, and share data and data products. It provides its platform through a customer-centric, and consumption-based business model. Its cloud-native architecture consists of three independently scalable but logically integrated layers across compute, storage, and cloud services. The compute layer provides dedicated resources to enable users to simultaneously access common data sets for many use cases with minimal latency. The storage layer ingests massive amounts and varieties of structured, semi-structured, and unstructured data to create a unified data record. Its ClearQuery platform allows users to rapidly search, explore, and analyze their data using natural language queries.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Snowflake Faces Competition and Valuation Pressure
- AI-Driven Growth: Snowflake positions its platform as essential infrastructure for enterprise analytics and AI workloads, although it faces competitive pressure from hyperscalers and Databricks, analysts believe its product revenue can still maintain a high 20% growth.
- Analyst Rating Adjustment: Bank of America analyst Koji Ikeda reiterated a Buy rating on Snowflake but lowered the price target from $310 to $275, reflecting changing views on future growth and the impact of sector multiple compression.
- Customer Spending Expectations: With broad AI adoption, Ikeda expects customer spending to continue increasing, as Snowflake serves as foundational infrastructure for enterprise data and AI workloads, helping companies manage complex datasets and potentially increasing market share.
- Cash Flow Improvement: The analyst noted that Snowflake is expected to achieve top-tier growth compared to infrastructure software peers while improving free cash flow margins, despite facing pricing pressure and the need for heavier investment in innovation from competitors.
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Software Stocks Plummet Amid AI Concerns
- Software Stock Decline: Software companies within the S&P 500 have seen an average decline of about 18% over the past six months, contrasting with a 9% rise in the index, indicating a severe lack of confidence in the software sector.
- Major Losers: SAP has dropped 30%, while Salesforce and ServiceNow have fallen by 20% and 40% respectively, reflecting heightened investor concerns about traditional software business models amidst rapid AI advancements.
- AI Impact Concerns: Investors worry that customers may develop in-house software solutions using AI tools from large language model providers, reducing reliance on SaaS companies, a trend exacerbated by the recent launch of Anthropic's Claude Cowork assistant.
- Increased Market Competition: Emerging companies like Aurasell and Artisan AI with AI-native platforms could directly challenge the competitive advantages of established software firms, although legacy companies are racing to introduce intelligent AI products to counter this threat, market adoption remains slow.
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