Snowflake (SNOW) Stock: Big Earnings Beat, Bigger Rally — Is There More to Come?

TLDR

• Snowflake gained more than 98% in May, with most gains coming after its fiscal Q1 2027 earnings beat on May 28.
• Revenue came in at $1.39 billion, beating estimates of $1.32 billion; EPS of $0.39 topped the $0.32 consensus.
• Needham raised its price target from $300 to $330, keeping a Buy rating after Snowflake’s annual user conference.
• Institutional investors including Vanguard, Jennison Associates, and TD Asset Management increased their positions in SNOW.
• Insider selling picked up, with directors Frank Slootman and Mark Garrett offloading a combined $68 million in stock.

Snowflake stock opened at $238.12 on Friday, well off its 12-month high of $284.99 but far above its low of $118.30. The stock has climbed roughly 98% in May alone, a move driven largely by a strong earnings report and a wave of analyst upgrades that followed.

Snowflake Inc., SNOW

The Q1 fiscal 2027 results were the clear trigger. Revenue hit $1.39 billion, clearing the $1.32 billion estimate. EPS came in at $0.39, beating the consensus of $0.32 by $0.07. Year-over-year revenue growth was 33.5%.

CEO Sridhar Ramaswamy called the quarter an “AI inflection point,” pointing to 34% product revenue growth. The company added 616 net new customers, a 38% year-over-year increase, bringing total customers to 13,912. The number of customers spending over $1 million annually now stands at 779, up 29% year over year.

Analyst Upgrades Roll In

The earnings beat sparked a round of price target increases. Needham raised its target from $300 to $330 after Snowflake’s annual Summit 26 conference, citing strong adoption of AI products like Cortex Code (CoCo) and Snowflake Intelligence. Stifel went from $205 to $300. Truist set a $300 target. Jefferies reiterated its Buy with a $300 target.

Barclays was more cautious, nudging its target from $272 to $285 with an equal weight rating. The consensus now sits at a “Moderate Buy” with an average target of $290.87, according to MarketBeat data.

Snowflake Intelligence more than doubled quarter over quarter. Cortex Code is already used by more than 7,100 accounts. Management said these two products are seeing the fastest adoption in company history.

The company also signed a new $6 billion multiyear agreement with Amazon Web Services, building on over $7 billion in lifetime AWS Marketplace sales. Snowflake also expanded its partnership with Anthropic, integrating Claude models into its Cortex AI platform.

Institutional Interest Rises, But Insiders Sell

On the institutional side, buying was broad. TD Asset Management raised its stake by 6.1% in Q4, ending with 145,863 units valued at around $32 million. Jennison Associates grew its position by 27.7%, now holding over 11.6 million units worth $2.5 billion. Vanguard added 1.45 million units, bringing its total to over 30 million. Norges Bank opened a new position valued at roughly $974 million. Institutional ownership stands at 65.10%.

Insider activity told a different story. Director Mark Garrett sold 100,000 units at $250.00 each on May 29, a 91.9% reduction in his position. Director Frank Slootman sold 162,924 units at $263.70 on June 1, cutting his stake by 81.07%. The Slootman sale was executed under a pre-arranged Rule 10b5-1 plan. Total insider sales over the past quarter reached $346.8 million.

Risks flagged by analysts include margin pressure from lower-margin AI products, stretched valuation — SNOW trades at a forward Price/Sales of 12.97x versus the industry’s 3.96x — and ongoing competition. Zacks currently rates SNOW a Hold.

For Q2 fiscal 2027, Snowflake guided for product revenue of $1.415 to $1.420 billion, implying 30% year-over-year growth.

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