Key Takeaways:
- Snowflake reported product revenue of $997 million in Q1, representing 26% year-over-year growth and marking stable quarter-over-quarter performance.
- It added 451 net new customers in Q1, growing 19% year-over-year, while maintaining healthy net revenue retention of 124%.
- With over 5,200 accounts using AI and machine learning weekly, Snowflake’s Cortex AI platform has evolved from a nascent product to a foundational enterprise AI pillar.
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Valued at a market capitalization of $68 billion, Snowflake Technologies (SNOW) operates as a comprehensive cloud data platform enabling organizations to mobilize their data across analytics, data engineering, and artificial intelligence workloads.
It serves enterprises through its AI Data Cloud, providing unified access to structured and unstructured data while supporting advanced analytics and machine learning capabilities.
SNOW stock has demonstrated remarkable resilience over the past year, with the company successfully navigating the transition from optimization pressures to renewed growth momentum.
Under CEO Sridhar Ramaswamy’s leadership, which began just over a year ago, the platform has accelerated product innovation while maintaining operational discipline.
The SNOW stock price in 2025 has reflected this transformation, with investors recognizing the company’s ability to execute across multiple growth vectors.
1. SNOW Stock Gains Post Strong Q1 Results
Snowflake stock exceeded expectations across key metrics in its first quarter fiscal 2026 results (ended in April).
Product revenue reached $997 million, growing 26% year-over-year. The quarter demonstrated the strength of Snowflake’s core analytics business alongside emerging contributions from newer product offerings.
Snowflake’s remaining performance obligations (RPO) totaled $6.7 billion, representing a 34% year-over-year increase, which indicates strong customer commitment and future revenue visibility.
A net revenue retention rate of 124% reflects a healthy expansion within the existing customer base, while the addition of 451 new customers signals effective market penetration strategies.
Management has raised its full-year guidance to $4.325 billion, indicating 25% year-over-year growth, which demonstrates confidence in sustained momentum throughout fiscal 2026.
These results have positively impacted the Snowflake stock price as investors gain confidence in the company’s execution capabilities.
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2. Snowflake Stock Benefits from Product Innovation Drive
SNOW stock has gained momentum as the company’s strategic focus on product velocity yields significant results.
Snowflake delivered over 125 new product capabilities in Q1, doubling the output from the same period last year. This acceleration reflects Snowflake’s commitment to addressing the complete data lifecycle from ingestion to insights.
The data engineering segment continues showing particular strength, with products like Snowpark and Dynamic Tables outperforming expectations.
Dynamic Tables, which simplifies data pipeline creation through SQL-based transformations, has contributed to the data engineering business’s $200 million run rate.
This success stems from the product’s ability to eliminate complex debugging and orchestration challenges that traditionally plague data pipeline implementations.
Snowflake’s adoption of Apache Iceberg represents a strategic shift that initially concerned investors but has proven to be expansive rather than cannibalistic.
By supporting open data formats, Snowflake has unlocked access to vastly larger data estates, with customers reporting 100 to 1,000 times more data available for processing when Iceberg compatibility removes migration barriers.
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SNOW Stock Positioned for AI-Driven Growth
Snowflake stock has benefited from the company’s AI platform, establishing a competitive moat. Cortex AI has over 5,200 accounts actively utilizing AI and machine learning capabilities every week.
The platform’s strength lies in its integration of best-in-class foundation models from partners like OpenAI, Anthropic, and Meta within Snowflake’s secure, governed environment.
Cortex Analyst has gained traction by enabling business users to query structured data using natural language, addressing a decades-old challenge in business intelligence.
The recent integration with Anthropic’s Claude models has catalyzed adoption by dramatically improving query reliability and accuracy.
Snowflake’s Cortex Agents platform, currently in preview, extends AI capabilities to orchestrate complex workflows combining structured and unstructured data sources.
This positions Snowflake as the foundation for agentic AI applications across various business functions, from sales operations to insurance underwriting.
Valuation Setup for SNOW Stock
Analysts tracking Snowflake stock expect its sales to rise from $3.6 billion in fiscal 2025 to $6.83 billion in fiscal 2028. Comparatively, free cash flow is forecast to increase from $884 million in 2025 to $1.98 billion in 2028.
SNOW stock currently trades at a forward market capitalization-to-free cash flow multiple of 54x, which is below its 3-year average multiple of 78x.
If the tech stock is priced at a multiple of 50x, it will trade around $310 in May 2027, indicating an upside potential of 50% from current levels.
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Average Analyst Price Target for SNOW Stock
Wall Street remains bullish on SNOW stock, with a consensus price target of $221. Analysts expect the stock to gain 8% from current levels.
Notably, SNOW stock currently has a high target price of $440 and a low target price of $150.
Of the 50 analysts tracking the tech stock, 38 recommend “Buys”, 10 recommend “Hold,” and two recommend “Sell.”
TIKR Takeaway for SNOW Stock
Snowflake stock presents a compelling investment opportunity as the company successfully balances growth investments with operational efficiency improvements.
The platform’s unique position at the intersection of cloud data management and artificial intelligence, combined with its fully managed, multi-cloud architecture, creates competitive advantages.
Trading at current valuations, SNOW stock offers exposure to the secular trends of cloud migration, data democratization, and enterprise AI adoption.
Moreover, its ability to expand its addressable market through products like Iceberg support and AI capabilities while maintaining strong unit economics positions it for sustained outperformance in the evolving data infrastructure landscape.
The Snowflake stock price reflects the market’s recognition of these competitive advantages and growth opportunities, making it an attractive option for investors seeking exposure to the rapidly expanding cloud data and AI markets.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
