Snowflake (SNOW) shares soared 13% in premarket trading on Thursday after the cloud software provider posted stronger-than-expected earnings and an optimistic outlook fueled by artificial intelligence (AI) demand.
Product revenue, a key indicator of Snowflake’s business health, grew 28% year-over-year to $943.3 million, beating projections of $914 million. The company projected first-quarter product revenue between $955 million and $960 million, signaling a 21%-22% increase from the previous year.
Analyst Reactions and Price Target Upgrades
Wall Street responded positively to Snowflake’s robust performance and bullish guidance. Citi analysts, who maintain a "buy" rating on the stock, noted improved visibility into AI-related product adoption, expecting acceleration in the latter half of the year.
BTIG analysts Gray Powell and Trevor Rambo highlighted strong core data warehouse consumption and momentum in new product initiatives. Monness Crespi & Hardt raised their 12-month price target on SNOW from $188 to $230, citing Snowflake’s solid market positioning and potential upside from AI innovations. Wedbush analysts, who rate Snowflake as "outperform" with a $210 target, described fiscal 2026 guidance as conservative but encouraging, with room for upside.
Wall Street responded positively to Snowflake’s robust performance and bullish guidance. Citi analysts, who maintain a "buy" rating on the stock, noted improved visibility into AI-related product adoption, expecting acceleration in the latter half of the year.
BTIG analysts Gray Powell and Trevor Rambo highlighted strong core data warehouse consumption and momentum in new product initiatives. Monness Crespi & Hardt raised their 12-month price target on SNOW from $188 to $230, citing Snowflake’s solid market positioning and potential upside from AI innovations. Wedbush analysts, who rate Snowflake as "outperform" with a $210 target, described fiscal 2026 guidance as conservative but encouraging, with room for upside.
Strategic Moves and CFO Transition
Beyond financials, Snowflake announced an expanded partnership with Microsoft (MSFT) to integrate OpenAI’s models into its Snowflake Cortex AI platform. This move underscores the company’s commitment to AI-driven innovation, which could further strengthen its market position.
Beyond financials, Snowflake announced an expanded partnership with Microsoft (MSFT) to integrate OpenAI’s models into its Snowflake Cortex AI platform. This move underscores the company’s commitment to AI-driven innovation, which could further strengthen its market position.
Additionally, Chief Financial Officer Michael Scarpelli announced his retirement, though he will remain in his role until a successor is appointed. While leadership transitions can cause uncertainty, Guggenheim analysts emphasized confidence in Snowflake’s management team and its ability to maintain momentum.
Outlook: Snowflake’s AI Advantage and Market Position
Despite volatility in the software sector, Snowflake appears poised for continued growth, particularly as enterprises increase AI-driven data workloads. The company forecasts fiscal 2026 product revenue of $4.28 billion, surpassing Wall Street’s estimate of $4.23 billion.
As AI adoption accelerates and cloud-based data solutions become integral to business operations, Snowflake’s strategic partnerships and innovative products position it as a key player in the evolving technology landscape. Investors remain optimistic, with analysts largely maintaining positive outlooks on the stock’s long-term potential.
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Despite volatility in the software sector, Snowflake appears poised for continued growth, particularly as enterprises increase AI-driven data workloads. The company forecasts fiscal 2026 product revenue of $4.28 billion, surpassing Wall Street’s estimate of $4.23 billion.
As AI adoption accelerates and cloud-based data solutions become integral to business operations, Snowflake’s strategic partnerships and innovative products position it as a key player in the evolving technology landscape. Investors remain optimistic, with analysts largely maintaining positive outlooks on the stock’s long-term potential.
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