Earnings Preview: Salesforce, Dell, and Snowflake

Table of Content

Salesforce Q3 earnings

Thursday 30 November

Salesforce look to head up the earnings for this forthcoming week, with the tech giant hoping to continue the steady increase in revenues. The company’s ability to outperform market estimates should be encouraging for shareholders, with the past eight quarters seeing the company beat both earnings and revenue expectations. This year has seen the company being targeted by activist investors, with five prominent shareholders pushing for changes that include greater cost cutting measures, share buybacks, and lower M&A. Marc Benioff’s apparent willingness to ease off on M&A activity in a bid to drive up profitability will come into question when we see third-quarter earnings data. The very public push to enhance the Einstein AI workforce during the recent OpenAI volatility does highlight the company’s desire to further build out their artificial intelligence services. Investors will be watching for greater signs of AI integration and services. With the company up almost 70% this year, investors will hope that the third-quarter earnings will set us up for a strong end to the year.

Summary of global analyst recommendations

10 analysts hold ‘strong buy’ recommendation
22 analysts hold ‘buy’ recommendation
15 analysts hold ‘hold’ recommendation
0 analysts hold ‘sell’ recommendation
1 analysts hold ‘strong sell’ recommendation

^{Source: Eikon}

Estimates

Revenues: $8.715 billion
Earnings: $2.06 per share

^{Source: Eikon}

^{Source: TradingView}

Dell Q3 earnings

Thursday 30 November

Computing giant Dell has enjoyed an impressive year with the stock punching into a record high in anticipation of the latest third quarter earnings. That recent push represents a break beyond the September peak where shareholders enjoyed a sharp 21% rise in the stock following impressive earnings for the second quarter. This time around shareholders will be hoping for more of the same with the company enjoying an enviable pattern of earnings outperformance over the past six quarters.

Dell has seen a significant growth in interest for their AI solutions, with the company hoping that this technology will provide a “strong tailwind” as laid out by CEO Jeffrey Clarke. The growth in hybrid work has helped drive increased demand for Dell laptops and computing solutions, with commercial sales a particular focus over recent quarters. However, that post-pandemic boost looks likely to be short-term in nature. The hope for Dell is that their new demand will be driven by the need to replace old technology with computers that have in-built AI capabilities for a more productive experience. With that in mind, additional colour on the range of products and outlook for their new AI computers will be key alongside the usual sales numbers.

Summary of global analyst recommendations:

4 analysts hold ‘strong buy’ recommendation
9 analysts hold ‘buy’ recommendation
4 analysts hold ‘hold’ recommendation
1 analysts hold ‘sell’ recommendation
0 analysts hold ‘strong sell’ recommendation

^{Source: Eikon}

Estimates

Revenues: $23.018 billion
Earnings: $1.46 per share

^{Source: Eikon}

^{Source: TradingView}

Snowflake Q3 earnings

Wednesday 29 October

Tech firm Snowflake has been on a roller coaster over recent years, with the company having seen heavy declines since its 2020 and 2021 peaks. That sell-off has seen the company lose roughly 58% in the past two-years, although many will look at this as a potential bottom for the stock. Snowflake’s data warehousing and analytics product offering appears to be on a verge of a fresh lease of life thanks to the recent AI enhancements. The second quarter earnings saw CEO Frank Slootman position the company as a company at the forefront of the generative AI revolution, with their partnership with Nvidia building on the how depth of data Snowflake hold. With Snowflake customers increasingly interested in utilizing generative AI in line alongside their data, markets will be watching closely for signs of a significant uptick in revenues as a result. As things stand, markets are looking for a steady growth in revenues, with earnings also expected to move significantly higher on a year-on-year basis.

The strength of their earnings in the second-quarter helped highlight the strength of the business over the past year, with strong onboarding and retention helped by an increasingly impressive book of top tier clients. The ability to introduce those clients to a whole new raft of generative AI services under the Snowpark Container Services product helps lift the value per customer. With the Snowflake Performance Index helping to create a more efficient product, margins appear to be improving as a result.