10 Best Magic Formula Stocks For The Rest Of 2024

6. Snowflake Inc. (NYSE:SNOW)

Number of Hedge Fund Investors In Q2 2024: 69

Gotham Asset Management’s Q2 2024 Stake: $59.8 million

Snowflake Inc. (NYSE:SNOW) is a cloud computing company headquartered in Montana. Its stock is down 38.6% year to date, with the selloff kicking off in February after its CEO resigned and the midpoint of first quarter revenue guidance came out at $747.7 million to significantly undershoot analyst estimates of $759 million. The lower guidance leading to an 18% share price drop is a classic for a SaaS stock as their hypothesis is built on the ability to grow consistently and control costs. Then, in its Q2 results, Snowflake Inc. (NYSE:SNOW) Q3 guidance came at a midpoint of $852.5 million which surpassed analyst estimates of $851 million by a hairline. Naturally, investors weren’t impressed and the stock tumbled by an additional 14.7%. Snowflake Inc. (NYSE:SNOW) hasn’t been controlling costs either, with roughly 96% of its revenue being spent on marketing, administrative costs, and research and development. While these can set it up well for future growth, it creates a lot of risk in the stock that investors appear to be avoiding.

Snowflake Inc. (NYSE:SNOW)’s CEO kept an upbeat tone during the Q2 2025 earnings call when he shared his three personal areas of focus:

“As I said last quarter, I have three key areas on personally focused on, listening to and learning from our customers, fueling innovation and product delivery, driving execution and alignment within our go to market team. And in Q2, we delivered on all fronts, which you can see in our results. Product revenue for the quarter was $829 million, up 30% year over year. Remaining performance obligations totaled $5.2 billion with year over year growth accelerating to 48%. Given the strong quarter, we are increasing our product revenue outlook for the year. Companies like Capital One, NBCU, Petco, Pfizer, Snapchat and Western Union are all relying on Snowflake to help them fuel their businesses. I’m really encouraged by the strength of our core business under rapid progress we have made on the AI front.

I’m very optimistic about where we are going and the opportunities we have in front of us to deliver for our customers. In fact, the more I’m with our customers, the more I appreciate just how critical they are to their business and how much they’re counting on us to be their trusted advisor in their AI data journey. Nothing brings to life how strong and trusted relationship is then when you go through challenges together.”