Snowflake Stock Scores a New Street-High Price Target After Beat & Raise Earnings

Snowflake (SNOW) stock shot higher out of the gate this morning after its Q2 fiscal 2026 earnings results, which showed revenue growing 32% year-over-year to $1.14 billion and adjusted earnings per share of $0.35 - significantly surpassing analyst estimates of $0.27. Product revenue, the core of Snowflake's business, reached $1.09 billion, up 32% year-over-year and exceeding expectations by approximately $51 million.

The software company's strategic focus on artificial intelligence (AI) integration has proven highly successful, with over 6,100 customer accounts actively using Snowflake's AI capabilities weekly, and AI now influencing nearly 50% of new customer acquisitions.

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In response to these strong results, Snowflake raised its fiscal 2026 product revenue guidance to $4.40 billion, representing 27% year-over-year growth, up from its previous forecast of $4.33 billion. The market has reacted to the beat-and-raise quarter by sending SNOW stock to a new 52-week high of $233.34, with the shares up by 18.7% this morning.

The stock has now gapped above its 21-day exponential moving average (EMA) and its 50-day simple moving average, with the 14-day Relative Strength Index (RSI) moving into overbought territory. Short-term traders should keep an eye on the Average Directional Index (ADX) as a check on trend strength.www.barchart.com

Inside SNOW’s Strong Quarter

Snowflake’s cloud-agnostic platform enables organizations to host and manage AI models from various cloud providers in a centralized environment, positioning it strategically within the AI infrastructure stack.

The company's high-profile partnerships with major cloud providers like Amazon (AMZN) AWS, Microsoft (MSFT) Azure, and Google (GOOG) (GOOGL) Cloud have helped expand its market reach and capabilities, while its focus on security and compliance features has resonated well with regulated industries. SNOW’s partnership with Microsoft Azure has shown particularly strong momentum, with Azure business rising 40% year-over-year in Q2, led by the EMEA region.

The Sales Cloud segment showed improving profitability metrics, with annual recurring revenue (ARR) now accounting for 62.9% of that segment's revenue, while Service Cloud delivered exceptional performance with 71.7% year-over-year revenue growth to $26.6 million. Snowflake maintained a healthy net revenue retention rate of 125% while expanding its customer base to include 654 customers, with trailing 12-month product revenue exceeding $1 million - representing a 30% increase from the previous year.

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Is SNOW Stock a Good Buy Right Now?

Snowflake's specialized data cloud offerings and ecosystem partnerships provide meaningful differentiation from cloud hyperscalers, positioning the company well for continued growth in the expanding cloud computing and AI markets. The company's flexible document model and enterprise-grade security features have proven particularly attractive for organizations developing next-generation AI applications, suggesting continued strong growth potential in the evolving database market.

However, investors should note that while Snowflake's execution remains strong, the stock trades at a premium valuation, with a forward price-to-sales ratio of 14.76x, significantly higher than the industry average of 5.7x.

Wall Street analysts maintain a broadly positive outlook on Snowflake's prospects, with most of the 44 experts in coverage rating the stock a "Strong Buy" despite recent volatility in the broader technology sector. SNOW is currently trading above its average 12-month price target of $231.43, but has already received post-earnings price-target hikes from analysts at Goldman Sachs, Wedbush, KeyBanc, and Piper Sandler - the last of which issued the most ambitious increase to $285, representing a new Street-high target.

This article was generated with the support of AI and reviewed by an editor. On the date of publication, the editor did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com

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