What Happened?
Shares of data warehouse-as-a-service Snowflake (NYSE: SNOW) jumped 11.7% in the afternoon session after the company reported impressive first quarter 2025 (fisal 2026) results, which beat analysts' sales expectations.
Additionally, profitability was much stronger than expected, leading adjusted operating profit and adjusted EPS to beat handily.
In an increasingly uncertain business environment, management clarified macro conditions weren't yet affecting demand, as products like Snowpark and Dynamic Tables continue to outperform, off the back of strong bookings, helped by two $100M deals in the financials vertical. Looking ahead, Q2 product revenue was slightly higher than Wall Street Consensus.
On the other hand, its billings missed and its net revenue retention decreased. This wasn't a perfect quarter, but it was still very solid.
Following the impressive results, Deutsche Bank analyst Brad Zelnick reiterated a Buy rating and raised the price target to $225. Zelnick highlighted Snowflake's increasing relevance in the evolving data and AI ecosystem, noting that the company's growing appeal for data science and AI workloads marked a potential inflection point. He thinks this positioning could drive the next phase of growth beyond traditional analytics use cases.
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What The Market Is Telling Us
Snowflake’s shares are quite volatile and have had 18 moves greater than 5% over the last year. But moves this big are rare even for Snowflake and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 28 days ago when the stock gained 6.9% on the news that stocks extended their rebound, led by strong gains in the technology sector, as renewed optimism surrounding U.S.–China trade negotiations lifted investor sentiment.
Contributing to the bullish tone was a standout earnings report from enterprise software leader ServiceNow, which topped Wall Street's expectations on RPO, profit and earnings. More importantly, the company's remaining performance obligations (RPO), a key forward-looking metric for future revenue, gave investors confidence that enterprise customers were not pulling back spending amidst uncertain macro.
This optimism was further reinforced by solid results from Texas Instruments and Lam Research. Their performance was especially encouraging for semiconductor stocks, which had been under pressure due to their exposure to global trade tensions. These earnings results suggested that, despite macroeconomic uncertainties, demand in key tech verticals remained resilient.
Snowflake is up 25.8% since the beginning of the year, and at $198.16 per share, has set a new 52-week high. Investors who bought $1,000 worth of Snowflake’s shares at the IPO in September 2020 would now be looking at an investment worth $780.38.
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