Snowflake (SNOW) stock is surging Thursday after the cloud company beat top- and bottom-line expectations for its fiscal 2025 fourth quarter, issued a better-than-expected revenue forecast for 2026 and announced an expanded partnership with Microsoft (MSFT).
In the three months ending January 31, Snowflake's revenue increased 27.4% year over year to $986.8 million, boosted by product revenue growth of 27.8% to $943.3 million. Earnings per share (EPS) declined 14.3% from the year-ago period to 30 cents.
"We delivered another strong quarter, with product revenue of $943 million, up a strong 28% year-over-year, and remaining performance obligations totaling $6.9 billion," said Snowflake CEO Sridhar Ramaswamy. "Today, Snowflake is the most consequential data and AI company in the world. More than 11,000 customers are already betting their business on our easy-to-use, efficient, and trusted platform."
The results topped analysts' expectations. Wall Street was anticipating revenue of $956.2 million and earnings of 17 cents per share, according to Investing.com.
For 2026, Snowflake said it expects to achieve product revenue of approximately $4.28 billion, representing growth of 24% from fiscal 2025 and ahead of analysts' expectations of $4.23 billion. For its first quarter, Snowflake anticipates product revenue in the range of $955 million to $960 million, implying growth of 21% to 22% from the year-ago period.
In a separate press release, Snowflake announced an expanded partnership with Microsoft that will "empower enterprises to build easy, efficient, and trusted AI-powered apps and data agents with OpenAI's models directly in Snowflake Cortex AI."
"There's enormous power in our customers being able to use OpenAI models directly in Snowflake's secure platform, unlocking multimodal, agentic, and conversational AI use cases that drive high impact," said Snowflake EVP of Product Christian Kleinerman.
Is Snowflake stock a buy, sell or hold?
Snowflake is down 28% over the trailing 12 months vs a gain of 19% for the S&P 500. But Wall Street is bullish on the tech stock.
According to S&P Global Market Intelligence, the consensus analyst target price for SNOW stock is $204.33, representing implied upside of about 11% to current levels. Meanwhile, the consensus recommendation is a Buy.
Financial services firm Oppenheimer maintained its Outperform rating (equivalent to a Buy) and raised its price target on the AI stock to $220 from $200 following the earnings release.
"Net, we're positive on the strong consumption trends, improving sales/GTM execution, and platform diversification, which highlight Snowflake's increasingly strategic relationship with customers," writes Oppenheimer analyst Ittai Kidron. "We're bullish," the analyst states, "and continue to view Snowflake as a top pick."
Kidron expects momentum from a strong fourth quarter to continue in fiscal 2026, "with room for upside to guidance" in the second half "as the portfolio expands."
