Snowflake eyes $1 billion Observe Inc deal to strengthen AI and monitoring capabilities

Snowflake Mulls $1 Billion Observe Buyout To Sharpen AI Edge - Snowflake (NYSE:SNOW)

Snowflake Inc. (NYSE:SNOW) is in talks to acquire application monitoring startup Observe Inc. for about $1 billion. The Information reported the potential deal on Wednesday, though the transaction has not yet been finalized. Observe offers a modern observability platform built on a streaming data lake. The technology is designed to enable faster searches, stronger data correlation, and lower operating costs for customers managing large-scale application data. Also Read: Snowflake Stock Slides After Q3 Beat -- Analysts Raise Targets Anyway Benzinga has reached out to Snowflake investor relations for comment and is awaiting a response. Deal Fits Broader AI And Data Strategy The reported talks follow Snowflake's recent push to expand its AI and cloud data capabilities. In November, the company acquired data startup Select Star to strengthen its metadata management and AI-driven analytics offerings. An acquisition of Observe would further extend Snowflake's reach into monitoring and observability, an area increasingly tied to AI workloads and cloud-native applications. Strong Earnings Backdrop Snowflake shares are up about 46% year to date, supported by demand for its AI-powered data platform and rising enterprise adoption. The company reported $1.94 billion in cash and cash equivalents as of Oct. 31, 2025. In the third quarter, Snowflake posted revenue of $1.21 billion, topping estimates of $1.18 billion. Adjusted earnings came in at 35 cents per share, above the 31-cent consensus. Revenue rose 29% year over year, driven by $1.16 billion in product revenue and a net revenue retention rate of 125%. Remaining performance obligations climbed 37% to $7.88 billion. Customers spending more than $1 million annually rose to 688. Outlook And Analyst View For the fourth quarter, Snowflake forecast product revenue of $1.195 billion to $1.20 billion, implying roughly 27% growth. The company also pointed to expanded partnerships with Amazon Web Services, a unit of Amazon.com, Inc. (NASDAQ:AMZN), Accenture plc (NYSE:ACN), and Anthropic, underscoring growing enterprise and AI-driven demand. Analysts remain broadly constructive following the third-quarter results, citing strong RPO growth and early AI adoption driving bookings. SNOW Price Action: Snowflake stock closed at $225.10 on Tuesday, down 0.77%, according to Benzinga Pro data. Read Next: Snowflake's New' AI-Driven Migration' Tech Could Speed Up Cloud Moves By 4x, Analyst Says Photo by JHVEPhoto via Shutterstock SNOWSnowflake Inc$224.80-0.13%OverviewACNAccenture PLC$270.77-%AMZNAmazon.com Inc$232.370.10%Market News and Data brought to you by Benzinga APIs

Snowflake in Talks to Acquire Observe to Expand Range of AI Offerings | PYMNTS.com

By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions. A deal would add Observe's observability tools for monitoring applications, including AI apps, to Snowflake's product portfolio that includes database technology and AI that handles IT tickets, customer service and other workplace tasks, The Information reported Wednesday (Dec. 24), citing unnamed sources. Reached by PYMNTS, Snowflake declined to comment on the report. Observe did not immediately reply to PYMNTS' request for comment. According to The Information, the companies already have close ties, with Observe using Snowflake's database, Snowflake's venture arm investing in Observe in 2024, and Observe CEO Jeremy Burton serving as a director on Snowflake's board. When Snowflake Ventures invested in Observe in March 2024, Snowflake said in a blog post that Observe's software-as-a-service (SaaS) observability product helps businesses ensure the performance, security and reliability of applications. The company added that its investment would expand the observability experience Snowflake provides for its customers. "Following the investment, Observe plans to develop best-in-class observability features that will help our customers monitor and manage their Snowflake environments even more effectively," Snowflake said in its post. "Solutions such as out-of-the-box dashboards and new visualizations will empower developers and engineers to accelerate their work and troubleshoot problems more quickly and easily." Snowflake announced in May 2024 that it was acquiring the TruEra AI observability platform, which helps users evaluate and monitor large language model apps and machine language models in production. The company said at the time in a blog post that this acquisition would enable Snowflake to help organizations ensure the quality and trustworthiness of AI. "TruEra's capabilities complement the AI and ML data governance functionalities we already provide in the AI Data Cloud," Snowflake said in its May blog post. "Snowflake provides deeply integrated capabilities to ensure the accuracy and trustworthiness of the data used to supplement and train models, and the observability technologies developed by TruEra will complement and round out that story for AI."