Snowflake Stock Is Soaring -- But Is It Too Late to Jump In?

Core Viewpoint - Snowflake's shares have experienced significant upward momentum following a strong fiscal first-quarter earnings report and increased guidance, with the stock up approximately 32% year-to-date and nearly 57% since early April [1] Group 1: Financial Performance - Snowflake reported a 26% year-over-year revenue growth, achieving over $1 billion in quarterly revenue for the first time, totaling $1.04 billion, surpassing the analyst consensus of $1.01 billion [6] - Product revenue increased by 26% to $996.8 million, while adjusted earnings per share (EPS) rose to $0.24 from $0.14 a year ago, exceeding the consensus estimate of $0.21 [6] - The company's net revenue retention rate was 124% over the past 12 months, indicating strong customer retention and expansion [7] Group 2: Customer Growth and AI Integration - Snowflake added 451 net new customers in fiscal Q1, representing a 19% year-over-year increase, and two large customers signed contracts exceeding $100 million despite delays in renewals [8] - The Cortex AI platform has been well-received, with over 5,200 accounts utilizing its AI and machine learning capabilities weekly, enhancing connectivity and integration with platforms like Google Drive [5][4] Group 3: Future Guidance - Snowflake raised its full-year product revenue guidance to approximately $4.325 billion, reflecting a 25% year-over-year growth, with fiscal Q2 product revenue forecasted between $1.035 billion to $1.045 billion [9] - The company anticipates an 8% operating income margin for both the full year and fiscal Q2 [9] Group 4: Market Position and Valuation - Despite a strong performance in 2025, Snowflake's stock remains about 50% down from its peak in fall 2021, which was considered overvalued at that time [11] - The forward price-to-sales (P/S) multiple is over 12x for this fiscal year's analyst estimates, indicating a fair valuation for a high-growth software-as-a-service (SaaS) company [13] - The ongoing challenge will be to demonstrate that AI positively impacts the business, which the company has been successfully managing so far [14]