The stock market has done an exemplary job of recovering from its early 2020 lows, and major market benchmarks continued to shrug off what might otherwise be considered terrible news to push higher into record territory. Despite unprecedented numbers of COVID-19 cases, hospitalizations, and deaths in the U.S., market participants instead seem to be focusing on the prospects for vaccine deployment to bring the pandemic under control in the coming months.
As of 11:30 a.m. EST on Thursday, the Dow Jones Industrial Average (^DJI -0.22%) was up 171 points to 30,055. The S&P 500 (^GSPC -0.06%) had gained 9 points to 3,678, putting it at a record high, and the Nasdaq Composite (^IXIC 0.31%) similarly had pushed into unprecedented territory with a rise of 63 points to 12,412.
After Zoom Video Communications (ZM 0.82%) disappointed investors by prompting a massive share-price decline even after posting strong business results in its most recent quarter, many investors believed that the tech boom that supported much of the bull market in the second part of 2020 might have come to an end. But today's action in tech contradicts that view, as both Snowflake (SNOW -1.14%) and Elastic (ESTC 4.63%) were rising sharply after their respective earnings reports.
Winter is coming for Snowflake, and that's a good thing
Shares of Snowflake rose 14%, hitting what would be a record closing high if the stock managed to finish at those levels. The recent IPO made headlines for pricing at an extremely high valuation, but that hasn't stopped the software-as-a-service stock from continuing to rise sharply.
Snowflake's fundamentals were strong. Revenue jumped 119%, with the company reporting 65 customers producing $1 million or more in annual sales. Snowflake's remaining performance obligations under current agreements more than tripled to nearly $928 million, well over a full year's worth of work for the future.
The data cloud specialist also showed that once it gets clients in the door, it hangs on to them. Net revenue retention rates for the quarter came in at 162%, showing not only that the service is sticky but that Snowflake is also doing a great job of getting existing customers to add more services and boost their spending on the platform.
Snowflake expects the strong growth to continue, providing guidance that product revenue could double in the fourth quarter from year-earlier levels. That gave shareholders the assurances they needed to see, and the stock's rise is no surprise in that light.
Elastic stretches higher
Elastic also had impressive gains, with its stock climbing 16%. The data search and analytics specialist's fiscal second-quarter results weren't quite as impressive as Snowflake's, but they still inspired new confidence among shareholders.
Elastic reported a 43% rise in total revenue year over year, with software-as-a-service sales climbing 81% over the same period. Calculated billings climbed 42%, and adjusted losses narrowed to just $0.03 per share. Subscriber counts jumped by about 3,200 over the past 12 months to 12,900, with more than 650 customers bringing in $100,000 or more in revenue for Elastic.
Investors were also pleased to see encouraging prospects for the future. Elastic expects to sustain its revenue run rate in the fiscal third quarter, with full-year fiscal 2021 sales also showing continuing growth. Although the company won't become profitable in the near future, Elastic is optimistic it will keep making progress on that front.
Tech is still running
Elastic and Snowflake are just a couple of the stocks showing that the tech sector is still alive and kicking. If the stock market continues to rise, then it'll likely be because of the continuing success of many top-rate companies like these.