Snowflake Stock Isn't Getting a Bump From Nvidia AI Yet -- Will That Change, and When?
As a new era of AI has seemingly begun (spurred on by ChatGPT), so has a new thesis for investing in Snowflake (NYSE: SNOW). Indeed, Snowflake's platform for digital data has quite the head of steam with lots of customer spending obligations, and the company struck a new partnership with none other than Nvidia (NASDAQ: NVDA) ahead of its financial update for the second quarter of fiscal 2024 (ended July 2023).
But Nvidia's epic boom in AI sales hasn't trickled down to Snowflake, at least not yet. On the contrary, management forecast yet another cool-off for the third quarter. Will that change as organizations look for ways to implement AI into their operations?
Before delving into some of the specific financial metrics, it's important to understand how Snowflake makes money. It charges customers based on "consumption," or use, of its data platform. Customers can sign long-term obligations to spend a certain amount on data storage and compute and score some discounts in the process, and any excess use over that contract tends to get charged at a higher variable rate.
Source Fool.com
