Key Stats for Snowflake Stock
- Price change for Snowflake stock today: 1.4%
- $SNOW Share Price as of Feb. 25: $169
- 52-Week High: $280
- $SNOW Stock Price Target: $266
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What Happened?
Snowflake (SNOW) stock gained about 2% in early-market trading on Wednesday as it crushed Wall Street’s fourth-quarter estimates and signed the largest deal in company history.
- The cloud data analytics company reported product revenue of $1.23 billion, up 30% year-over-year and well above analyst expectations of $1.18 billion.
- Adjusted earnings came in at 32 cents per share, beating the 27-cent consensus.
- The company also announced a $400 million-plus contract, its biggest ever, with a financial services customer.
- This massive deal highlights the growing trust enterprises are placing in Snowflake as their data and AI platform of choice.
- For the full fiscal year 2026, the company added 2,332 net new customers and now serves more than 13,300 clients.
- What really caught attention was Snowflake’s AI momentum.
- The company’s Snowflake Intelligence platform, launched in November, has already been adopted by more than 2,500 customers in just three months, nearly doubling from the previous quarter.
Meanwhile, Cortex Code, Snowflake’s AI coding agent, is now being used by over 4,400 customers to accelerate application development.
CEO Sridhar Ramaswamy emphasized that AI is transforming the company from a data analytics platform into “the platform where customers build and run AI-native applications and workflows.”
- The company reported that more than 9,100 accounts are now using its AI products, marking the largest sequential increase ever.
- Looking ahead, Snowflake stock got a boost from strong guidance.
- The company expects fiscal 2027 product revenue of $5.66 billion, representing 27% growth and above the $5.50 billion analyst consensus.
- First-quarter revenue guidance of $1.26 billion to $1.27 billion also topped expectations of $1.23 billion.
- On the profitability front, Snowflake demonstrated improving efficiency. Non-GAAP operating margin expanded more than 400 basis points year-over-year to 10.5%, while stock-based compensation declined from 41% of revenue in fiscal 2025 to 34% in fiscal 2026, with expectations to drop further to 27% in fiscal 2027.
- The company also closed its $600 million acquisition of Observe, an observability platform, which extends Snowflake’s capabilities into the $50 billion IT operations market.
CFO Brian Robins noted that Observe will contribute approximately 1 percentage point to fiscal 2027 product revenue growth.
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What the Market Is Telling Us About Snowflake Stock
The modest decline in Snowflake stock reflects broader investor anxiety about traditional software companies in the AI era rather than concerns about Snowflake’s actual performance.
However, Snowflake appears to be on the winning side of this transition.
The company’s remaining performance obligations surged 42% year-over-year to $9.77 billion, marking the second consecutive quarter of improvement.
This massive backlog of bookings suggests customers are making long-term commitments to the platform.
- The company signed seven nine-figure deals in the fourth quarter alone, compared to just two in the same period last year.
- These mega-deals demonstrate that enterprises view Snowflake as mission-critical infrastructure for their data and AI strategies.
- The $400 million contract, in particular, represents a maturity milestone showing Snowflake has evolved from a data warehousing solution into a comprehensive enterprise platform.
- Net revenue retention remained healthy at 125%, indicating that existing customers are significantly expanding their usage.
- The company now has 733 customers spending more than $1 million annually, up 27% year-over-year, and 56 customers above the $10 million threshold, up 56% year-over-year.
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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!
