Cloud stocks mostly higher as Snowflake 20% gain leads sector higher
TU IS

Cloud computing stocks were mostly higher on Thursday, led by a near 20% gain in Snowflake (NYSE:SNOW), after the data warehousing company posted strong second-quarter results and guidance, leading several Wall Street analysts to point out its "strategic nature."
Morgan Stanley analyst Keith Weiss, who has an overweight rating on Snowflake (SNOW), said Snowflake (SNOW) being able to sustain more than 80% growth in product revenue in light of economic weakness shows how important the company's platform has become.
"Sustained 80%+ product revenue growth in a quarter when the broader demand environment for software softened likely boosts investor confidence that Snowflake's cloud data platform is viewed as a strategic (and durable) area of investment by enterprise customers," Weiss wrote in a note to clients.
For the third quarter, Snowflake (SNOW) sees product revenue of $500M to $505M, up between 60% and 62% year-over-year, along with an adjusted operating margin of 2%. 
Snowflake (SNOW) also boosted its product revenue forecast for the full-year to be between $1.905B and $1.915B, a growth rate of between 67% and 68%. It also forecast an adjusted operating margin of 2% for the full-year, compared to a previous view of 1%.
Competitors MongoDB (MDB) and Datadog (DDOG) both saw healthy gains on back of the results, rising 7% and 4%, respectively.
Oracle (ORCL), Microsoft (MSFT), Google (GOOG) (GOOGL) and Amazon (AMZN), some of which compete with or partner with Snowflake (SNOW), also saw modest gains.
Salesforce (NYSE:CRM) fell 5.5% on Thursday after the Marc Benioff-led company lowered its full-year revenue forecast, prompting some Wall Street analysts worried that the outlook could be the "first shoe to drop" in a broader slowdown.
Splunk (NASDAQ:SPLK) also fell sharply, losing 12%, after the software firm posted weaker-than-expected figures in the second-quarter as customers delayed their migrations to the cloud because of budgetary concerns.
Hedge fund 3G Capital recently disclosed that it exited its stake in Snowflake (SNOW) during the second quarter, while making several other changes to its portfolio.