Snowflake Stock Surges 12% as New AI Products Drive Sales Beat

Snowflake Inc. (NYSE: SNOW), the AI Data Cloud company, has seen its stock price surge by 12% following the release of its strong fiscal 2025 fourth-quarter earnings. The company reported adjusted earnings of $0.30 per share, beating analyst estimates of $0.18, and revenue of $987 million, surpassing expectations of $956 million. This impressive performance can be attributed to the company's recent AI product launches and its continued growth in the AI Data Cloud market.



Snowflake's CEO, Sridhar Ramaswamy, attributed the company's success to its ability to capitalize on the unyielding AI demand and ongoing cloud migrations. The company's product revenue growth outlook of 20% or more for 2026 further solidified investors' confidence in its ability to justify its premium valuation. As a result, Morningstar raised its fair value estimate for Snowflake to $165 per share from $129, indicating that the company's stock is now considered slightly overvalued compared to its raised valuation.

One of the key drivers of Snowflake's recent success is its Snowflake Cortex AI platform, which provides a suite of generative AI features. The platform's adoption has more than doubled in the past six months, demonstrating its growing popularity among enterprises. Additionally, Snowflake's latest innovations, such as multimodal support, knowledge base connectors, and document preprocessing functions, have made it easier for enterprises to build high-quality conversational apps and improve the cost and performance of their AI initiatives.



Snowflake's strong performance has also been driven by its ability to attract and retain large enterprise customers. The company now has 580 customers with trailing 12-month product revenue greater than $1 million, representing a 27% year-over-year growth. Additionally, Snowflake's net revenue retention rate of 126% indicates that the company is successfully retaining its existing customers and expanding its customer base.



In conclusion, Snowflake's recent stock surge can be attributed to its strong fiscal 2025 fourth-quarter earnings and the company's continued growth in the AI Data Cloud market. The company's AI product launches, such as Snowflake Cortex AI, have driven its sales beat and solidified investors' confidence in its long-term growth prospects. Despite Morningstar's assessment that the company's stock is slightly overvalued, Snowflake's strong performance and growth potential make it an attractive investment opportunity for those looking to capitalize on the AI Data Cloud market.