Snowflake Stock Soars as AI Demand Fuels Record Performance

Snowflake continues to demonstrate why it remains one of the technology sector’s most compelling growth narratives. The data cloud specialist’s latest quarterly results smashed expectations, igniting a spectacular rally driven by unrelenting demand for artificial intelligence solutions. This performance raises questions about whether the company can sustain this remarkable pace in a competitive landscape.

AI Integration Drives Exceptional Growth

The catalyst behind Snowflake’s impressive results is clearly artificial intelligence. CEO Sridhar Ramaswamy highlighted the technology’s transformative impact, revealing that AI already influences nearly 50% of all new customer acquisitions. More than 6,100 accounts now utilize Snowflake’s AI capabilities weekly, while a quarter of all platform use cases incorporate AI components.

This technological adoption is translating into concrete business metrics:
* Remaining Performance Obligations surged 33% to $6.9 billion
* Net Revenue Retention Rate maintained a robust 125%
* The company added 533 new customers, including 15 Global 2000 enterprises

Quarterly Earnings Exceed Expectations

Snowflake’s fiscal second quarter 2025 performance left no room for disappointment. The company reported product revenue of $1.09 billion, representing 32% year-over-year growth and significantly surpassing consensus estimates of $1.04 billion.

Should investors sell immediately? Or is it worth buying Snowflake?

Profitability metrics proved even more impressive. With adjusted EPS reaching $0.35, Snowflake nearly doubled its year-ago results and far exceeded analyst projections of $0.27 per share. This operational strength extended to margin performance, where the non-GAAP operating margin expanded to 11%, outperforming the company’s own 8% guidance and signaling growing profitability.

Market Response and Revised Outlook

The financial markets responded enthusiastically to these results. Following the earnings release, Snowflake shares surged over 20%, reaching new 52-week highs. Analyst firms quickly adjusted their assessments, with BTIG raising its price target to $276, Jefferies to $270, and RBC Capital to $275.

Management’s upgraded forecasts reinforce this confidence. For full-year 2026, Snowflake now anticipates product revenue of $4.395 billion, representing 27% growth. The company also raised its operating margin guidance to 9%.

As Snowflake capitalizes on the AI revolution, investors are left to consider whether the company can maintain this impressive momentum in the volatile technology sector or if the stock has already priced in its near-term potential.