We recently published a list of 10 Stocks Jim Cramer is Talking About. In this article, we are going to take a look at where Snowflake Inc. (NYSE:SNOW) stands against other stocks Jim Cramer is talking about.
On a recent episode of Mad Money, Jim Cramer suggests that perhaps we are misjudging the retail sector. He argues that the debate over whether consumers are sick, well, frugal, or stressed might be misguided. According to Cramer, consumer behavior doesn’t shift dramatically overnight; people don’t suddenly change from being sick to well within a single quarter. As we look ahead to the Fed’s discussion at Jackson Hole on Friday, with the market averages rising by 56 points and the S&P 500 increasing by 42%, it’s clear we need to reassess our views on the consumer’s state.
“Maybe we’re looking at retail all wrong. Perhaps this whole discussion about whether the consumer is sick, well, frugal, or stressed is just a big pile of manure. The consumer doesn’t change their behavior overnight; they don’t get sick and then recover within a single quarter. As we consider what the Fed will discuss on Friday at Jackson Hole, with the averages inching up 56 points and the S&P 500 advancing 42%, we need to rethink the great debate about the state of the consumer.”
Jim Cramer points out that understanding consumer behavior is crucial for predicting when the Fed might cut interest rates. He explains that the Fed needs to lower rates before the economy worsens to the point of needing urgent intervention. However, the Fed can’t act if the economy is performing well.
“This debate is central to what the market needs to see for rate cuts. We first need to understand that the Fed has to start cutting interest rates before the economy deteriorates to a point where they need to scramble to fix things. However, they can’t act if the economy is doing fine. The aggregate retail sales data is inconclusive, so we often try to extrapolate from individual retailers. Taken together, these retailers seem to suggest that the consumer is fickle and perhaps tapped out.”
Jim Cramer argues that the current debate about consumer behavior might be misguided. He believes that consumers are not as fickle as some suggest. Instead, they are shopping at stores led by successful retail CEOs like Ron Vachris, Doug McMillon, Ernie Herman, and Brian Cornell.
“Tonight, I’m arguing that the consumer is not fickle at all. People are shopping, and they’re shopping at places where great retail CEOs are making a difference, like Ron Vachris at Costco, Doug McMillon at Walmart, Ernie Herman at TJX, and Brian Cornell at Target. These are the places people are choosing to shop. The consumer isn’t frugal or tight-fisted; they’re simply shopping where they prefer, and these outstanding merchants are drawing them in.”
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A software engineer at work, surrounded by a wall of computer monitors connected to a ‘Data Cloud’ platform.
Snowflake Inc. (NYSE:SNOW)
Number of Hedge Fund Investors: 69
In his interview with Shar Ramaswami, the CEO of Snowflake Inc. (NYSE:SNOW), Jim Cramer pointed out that the company had a strong quarter with results that exceeded expectations. He highlighted a notable beat in the non-GAAP operating margin and a two-cent beat in non-GAAP earnings per share.
“Now, I have to point out that you actually had a very solid quarter—better than expected results, including a significant non-GAAP operating margin beat and a two-cent non-GAAP earnings per share beat.”
Snowflake Inc. (NYSE:SNOW) is a key player in cloud-based data warehousing and analytics, offering a platform that allows for seamless data storage and analysis across multiple clouds. This capability is vital in today’s data-driven world, where secure and scalable data sharing is increasingly important. Snowflake Inc. (NYSE:SNOW) is seeing strong growth, with a 36% increase in revenue year-over-year for Q2 FY2024 and a 24% rise in Remaining Performance Obligations, indicating high demand and a solid revenue outlook.
Snowflake Inc. (NYSE:SNOW)’s growing customer base, including many large enterprises and Fortune 500 companies, along with a 29% increase in customers spending over $1 million annually, highlights its strong market appeal and the value it provides.
Snowflake Inc. (NYSE:SNOW)’s net revenue retention rate of 142% shows its success in retaining customers and increasing its spending. Strategic partnerships with major cloud providers such as AWS, Microsoft Azure, and Google Cloud broaden Snowflake’s market reach and integration. Ongoing innovations like the data marketplace, Snowpark, and new applications further boost its platform’s attractiveness.
Overall SNOW ranks 5th on our list of stocks Jim Cramer is talking about. While we acknowledge the potential of SNOW as an investment, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than SNOW but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.