Snowflake shares rise on AI-driven growth outlook

Snowflake Inc (NYSE:SNOW) shares jumped 4.6% successful Thursday greeting trading aft the unreality information level reported quarterly results that bushed Wall Street expectations and highlighted beardown maturation fueled by endeavor AI adoption.

The institution posted fourth-quarter fiscal 2026 gross of $1.28 billion, exceeding analysts’ estimation of $1.25 cardinal and marking a 30% summation from the anterior year.

Earnings per stock came successful astatine $0.34, supra the $0.27 expected.

Adjusted escaped currency travel roseate 61% year-over-year to $782.2 million, surpassing estimates of $745 million.

Snowflake besides reported nett gross retention of 125% and remaining show obligations of $9.77 billion, up 42% from a twelvemonth earlier. Total lawsuit accounts reached 13,328, supra the Street’s 13,070 estimate, with 733 customers generating much than $1 cardinal successful trailing 12-month merchandise revenue, a 27% summation year-over-year. Net caller lawsuit additions roseate 40% to 740.

Snowflake’s fiscal first-quarter 2027 guidance projects merchandise gross of $1.262 cardinal to $1.267 billion, up 27% year-over-year. For full-year FY27, the institution expects merchandise gross of $5.66 billion, besides up 27%, with a non-GAAP merchandise gross nett borderline of 75%, non-GAAP operating borderline of 12.5%, and adjusted escaped currency travel borderline of 23%.

The institution highlighted continued traction successful AI offerings, with astir 9,100 accounts present leveraging Snowflake AI, up from 7,300 successful the anterior period. Its Agentic AI Snowflake Intelligence present counts 2,500 customers, astir treble the anterior period, portion Cortex AI adoption has besides accelerated.

Gross margins of 71.7% exceeded Street expectations of 71.1%, driven by merchandise gross margins of 75.1%. Operating margins of 10.8% were good supra guidance of 7%.

Analysts astatine Wedbush noted Snowflake’s presumption arsenic a cardinal enabler for endeavor AI, highlighting that improvements successful foundational models summation the request for clean, governed, and auditable data, strengthening request for Snowflake’s halfway information warehousing solutions. They maintained an “Outperform” standing with a $270 terms target.