Snowflake Stock Rallies on Rising Revenue

Core Insights - Snowflake's stock surged after the company exceeded revenue and earnings expectations for Q4 of fiscal 2025, provided a positive revenue forecast for 2026, and announced an expanded partnership with Microsoft [1][4]. Financial Performance - For the three months ending January 31, Snowflake reported a revenue increase of 27.4% year-over-year to $986.8 million, with product revenue growing 27.8% to $943.3 million. However, earnings per share (EPS) fell 14.3% to 30 cents [1][2]. - The company anticipates product revenue of approximately $4.28 billion for fiscal 2026, reflecting a growth of 24% from fiscal 2025, surpassing analysts' expectations of $4.23 billion [4]. Market Expectations - Analysts had projected revenue of $956.2 million and earnings of 17 cents per share, indicating that Snowflake's results exceeded these expectations [3]. - For the first quarter of fiscal 2026, Snowflake expects product revenue between $955 million and $960 million, suggesting a growth of 21% to 22% year-over-year [4]. Strategic Partnerships - Snowflake announced an expanded partnership with Microsoft, aimed at enabling enterprises to develop AI-powered applications using OpenAI's models directly within Snowflake's platform [5][6]. Analyst Sentiment - Despite a 28% decline in Snowflake's stock over the past 12 months, analysts remain optimistic, with a consensus target price of $204.33, indicating an implied upside of about 11% [7]. - Oppenheimer maintained an Outperform rating and raised its price target to $220, citing strong consumption trends and improved sales execution as key factors for continued growth [8].