Key Points

Snowflake delivered impressive first-quarter performance and provided optimistic forecasts.
The firm is performing strongly across operations, yet its valuation remains elevated.
10 stocks we prefer over Snowflake

Snowflake (NYSE: SNOW) shares climbed sharply following the release of solid first-quarter figures. The equity had faced challenges earlier in the year, so even with the recent advance it stands only about 14 percent higher year to date as of this writing.

We examine Snowflake's quarterly results and future outlook to determine if the moment has passed for new purchases or if the positive trend can persist.

Will AI produce the world's first trillionaire? Our analysts have published an update on the lesser-known firm, described as an Indispensable Monopoly, that supplies essential technology required by both Nvidia and Intel. Continue

Image source: The Motley Fool.

Revenue growth picks up pace

Although investors have at times regarded Snowflake as an artificial intelligence underperformer, the business keeps showing it stands to gain substantially from AI adoption. Its Snowflake Intelligence and Cortex Code coding agent are fueling expansion, with over 13,600 accounts now utilizing its AI offerings. This activity is also boosting usage of the core cloud data platform, supplying the organized information essential for agentic AI systems. The company further revealed plans to purchase Natoma to strengthen oversight and protection for agentic AI processes.

During the first quarter Snowflake achieved year-over-year revenue expansion of 33 percent reaching 13.9 billion dollars, an improvement from the 30 percent pace recorded in the fourth quarter and 29 percent in the third quarter. Product revenue likewise advanced 33 percent to 1.33 billion dollars. Adjusted earnings per share jumped 63 percent to 0.39 dollars from 0.24 dollars in the prior-year period.

Net revenue retention reached a healthy 126 percent over the trailing twelve months. Any figure above 100 percent indicates rising engagement from current clients after adjusting for departures.

Snowflake also succeeded in attracting fresh customers, expanding its total by 38 percent from a year earlier. It secured eight additional clients each generating more than 10 million dollars in spending, bringing the cumulative count to 64.

Looking forward, Snowflake raised its annual projection. It now anticipates product revenue of 5.84 billion dollars, equating to 31 percent growth, compared with the earlier target of 5.66 billion dollars or 27 percent growth. It projects adjusted operating margins of 13.5 percent, higher than the previous 12.5 percent expectation.

For the second fiscal quarter the company guided product revenue between 1.415 billion dollars and 1.420 billion dollars, implying roughly 30 percent expansion. It anticipates adjusted operating margins of 12.5 percent.

Is it too late to acquire Snowflake equity?

Although the share price has fluctuated during the broader software-as-a-service downturn, the company continues to execute effectively. It is proving to be a clear beneficiary of AI trends and stands to gain further from the expansion of agentic AI capabilities.

Nevertheless the recent price increase has lifted its valuation to a forward price-to-sales multiple of 14 for the current fiscal year based on analyst projections. While this level is reasonable relative to growth, software multiples have generally declined. Therefore I am not pursuing the shares following the sharp advance.

Should you acquire Snowflake shares at present?

Before purchasing Snowflake equity, review the following:

The Motley Fool Stock Advisor team has identified the 10 strongest equities for investors to consider now, and Snowflake did not appear on that list. The 10 selections could deliver substantial gains over the coming years.

Recall that when Netflix appeared on this list on December 17, 2004, a 1,000-dollar investment then would now be worth 463,900 dollars. Similarly, when Nvidia was added on April 15, 2005, the same initial sum would today equal 1,294,401 dollars.

It is also worth noting that Stock Advisor has produced an average total return of 978 percent, far exceeding the 211 percent gain of the S and P 500. Do not overlook the newest top-10 roster, accessible via Stock Advisor, and become part of an investment community created by individual investors for individual investors.

View the 10 stocks

Stock Advisor returns as of May 31, 2026.

Geoffrey Seiler holds no positions in any securities discussed. The Motley Fool maintains holdings in and endorses Snowflake. The Motley Fool maintains a disclosure policy.

The perspectives and statements presented here belong to the author and may not align with those of Nasdaq, Inc.