ii view: this powerful tailwind makes Snowflake surge over a third

Photo: INA FASSBENDER/AFP via Getty Images.

First-quarter results to 30 April  

• Revenue up 33% $1.39 billion (£1.04 billion)
• Adjusted earnings per share (EPS) of $0.39, up from $0.24

Chief executive Sridhar Ramaswamy said:

“AI continues to be a powerful tailwind for Snowflake, and Q1 marks a clear inflection point in that journey.

“We are seeing strong momentum from both AI-driven acceleration of our core platform and growing adoption of our first-party AI products, positioning Snowflake to lead in this new era.”

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ii round-up:

Snowflake Inc Ordinary Shares detailed sales and earnings that beat forecasts, with the analyser and moderniser of data for corporations also enhancing services via a new $6 billion five-year contract with Amazon’s AWS cloud data business.

First-quarter revenues rose 33% from a year ago to $1.39 billion (£1.04 billion), driving a near two-thirds increase in adjusted earnings to $0.39 per share. Analysts had expected $1.32 billion and $0.32 per share. The Montana headquartered company also raised expected annual sales growth to 31%, or $5.84 billion, from a previous growth estimate of 27%.

Shares in  New York listed Snowflake soared by just over a third in post results trading having come into these latest figures down by a fifth so far in 2026. Fellow software makers Adobe Inc and Salesforce Inc are down by around a third year-to-date, while chip makers Micron Technology Inc and Intel Corp have each soared by more than 200%. The tech heavy Nasdaq Composite index is up almost 15% so far in 2026.

Snowflake unites and analyses data from servers across the global on behalf of customers such as Merck and United Rentals. The company added 616 net new customers in the quarter, a rise of 38% from a year ago and including 13 new Forbes Global 2000 customers. Total customers now number over 13,900.

Group customers with trailing 12-month product revenues of more than $1 million rose to 779 from 733 in the prior quarter. More than 13,600 customers are now using Snowflake’s AI capabilities.

Management also flagged the acquisition of AI start-up Natoma for an undisclosed sum. Natoma is being purchased to make it easier for customers to not just safely manage their data, but also the actions AI agents take across business workflows.

Broker Morgan Stanley reiterated its ‘overweight’ stance on Snowflake shares post the results, increasing its fair value estimate to $300 per share from $245 previously. It also named Snowflake as a software company winner in the era of AI.  

ii view:

Started in 2012 and joining the stock market in 2020, Snowflake today employs around 9,000 people. Geographically, the USA accounted for most sales during its last financial year at 75%, followed by Europe, the Middle East, and Africa at 16% and Asia-Pacific and Japan 6%, with the Americas making up the balance at 3%.  

For investors, the exact impact of AI on software companies broadly remains hard to predict. Increased costs being suffered by corporations given the war in the Middle East and elevated energy prices could slow IT spending.  A share price-to-net asset value at just over twice the three-year average may suggest the shares are not obviously cheap, while the group’s activities are sure to have been noticed by rival tech companies.  

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On the upside, customer numbers and revenues are growing, helped by services to aid customers with their own AI provision. Geographical and product diversity exist. CEO from early 2024, Sridhar Ramaswamy, has looked to reinvigorate group strategy including a new focus on product innovation, while AI itself is increasing Snowflake's own efficiency, reducing staff hiring and costs.  

In all, a share price now close to the consensus estimate of $229 may offer some caution. That said, with corporate AI ambitions difficult without data modernisation and transformation initiatives, support for this US tech company looks unlikely to melt away any time soon.

Positives:

• Growing customer numbers
• Increasing use of data

Negatives:

• Uncertain economic outlook
• No dividend payment

The average rating of stock market analysts:

Buy