Shares of Snowflake (SNOW +6.83%) soared on Thursday, as investors cheered the data warehousing leader's artificial intelligence (AI)-fueled growth projections.
Image source: The Motley Fool.
The bears were wrong
Snowflake, like many software stocks, had seen its share price pressured by fears that new AI-native rivals would disrupt traditional software-as-a-service (SaaS) business models. Prior to today, its stock price was down roughly 20% in 2026.
Snowflake laid many of those fears to rest on Thursday. The cloud-based data platform's first-quarter financial report showed that Snowflake is poised to benefit from AI more than it stands to lose.
NYSE: SNOW
Key Data Points
Snowflake's revenue surged 33% year over year to $1.39 billion in the quarter ended April 30. The data management specialist is both winning new business and increasing sales to existing clients. Customers with trailing 12-month product revenue of over $1 million jumped 29% to 779.
"AI continues to accelerate our core data platform business as customers move to Snowflake with increasing urgency," chief financial officer Brian Robins said.
CEO Sridhar Ramaswamy highlighted the success of the company's new AI-powered coding tools and enterprise AI agent platform.
"AI continues to be a powerful tailwind for Snowflake, and Q1 marks a clear inflection point in that journey," Ramaswamy said. "With Cortex Code and Snowflake Intelligence, we are extending from the trusted foundation for enterprise data and context to become the control plane for the Agentic Enterprise."
Raised guidance
These AI-driven gains prompted Snowflake to boost its full-year sales and profit targets. Management now sees product revenue soaring 31% to $5.84 billion, with an adjusted operating margin of 13.5%. That's up from prior forecasts of 27% revenue growth and an adjusted operating margin of 12.5%.
