Snowflake (SNOW) stock has popped more than 7% this morning after the software company reported exceptionally strong fourth-quarter results, with revenue climbing 27% year-over-year to $986.8 million to crush Wall Street’s expectations. The cloud software provider's product revenue showed particularly impressive growth, increasing by 28% to reach $943.3 million, while adjusted EPS of $0.30 nearly doubled analyst predictions of $0.18.
Snowflake Guides for Strong Product Revenue Growth
Customer metrics remain robust, with 580 customers now generating over $1 million in annual revenue, and Snowflake maintains a strong net revenue retention rate of 126%. The company's strategic positioning in the artificial intelligence (AI) subsector has been bolstered by an expanded partnership with Microsoft (MSFT), which will integrate OpenAI models into Snowflake Cortex AI, potentially opening new growth avenues.
Looking ahead, Snowflake’s management provided optimistic guidance for fiscal 2026. Full-year product revenue is estimated at $4.28 billion, representing a 24% growth rate, while current-quarter product revenue is expected to range between $955 million and $960 million, indicating a 21-22% year-over-year increase.
Roughly a year after SNOW stock was rocked by the surprise departure of founder and CEO Frank Slootman, another leadership transition is on the horizon, as CFO Mike Scarpelli announced his retirement plans. Scarpelli will remain on board during the search for his successor to ensure a smooth transition.
Key Levels to Watch for SNOW Stock
SNOW has broken out above its 50-day moving average with today’s positive earnings reaction, although the round $190 level has so far slowed the stock’s intraday progress.
The stock is trading well above both its 100-day moving average at $154.85 and its 200-day moving average of $141.96, indicating a strong long-term uptrend. For now, the most critical levels to monitor are the immediate resistance at $182.57 (20-day MA) and support at $173.06 (50-day MA), as a break above or below these levels could signal the next significant move.
From a longer-term perspective, the software stock is down about 23% over the past 52 weeks, lagging the broader market. However, with a forward price/earnings-to-growth (PEG) ratio of 6.28, underperforming SNOW is still priced at a remarkable premium to its tech sector peers.
What Does Wall Street Say About Snowflake?
Based on the latest analyst ratings, Snowflake is a bullish favorite among Wall Street analysts, with 31 “Strong Buys” out of 42 total recommendations. The analyst consensus has actually improved from three months ago, when SNOW had 26 “Strong Buys,” showing increasing optimism about the company's prospects.
After earnings, Wedbush reiterated an “Outperform” rating and a $210 price target for SNOW, while Jefferies backed a “Buy” opinion with a $220 price target. Morgan Stanley is somewhat less enthusiastic about SNOW, with analysts led by Keith Weiss reiterating an “Equal Weight” rating and a $190 price target today.
In a note to clients, Jefferies analysts led by Brent Thill wrote that Snowflake is "back on track towards an acceleration narrative and view the story as a key AI play investors need to continue to be long in '25."
Overall, Wall Street has an average price target of $198.79 on the stock, representing a premium of about 10% from current levels.
This article was generated with the support of AI and reviewed by an editor. On the date of publication, the editor had a position in: MSFT . All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
/Broadcom%20Inc%20logo%20on%20building-by%20Poetra_%20RH%20via%20Shutterstock.jpg)
/Nvidia%20logo%20on%20phone%20screen%20with%20stock%20chart%20by%20xalien%20via%20Shutterstock.jpg)
