Snowflake (SNOW) Stock Forecast & Price Target

Snowflake's positive outlook is bolstered by a notable 11% year-over-year growth in New Annual Recurring Revenue (ARR) and an increase in high-value customers, with 580 clients now spending over $1 million on a trailing twelve-month basis, reflecting a 7% sequential rise. The company also demonstrated a substantial 33% year-over-year growth in Remaining Performance Obligations (RPO), signaling robust future revenue potential despite a slowing growth rate relative to previous quarters. Additionally, strong performance in the technology sector and effective cost management contribute to expectations of sustained product revenue growth exceeding 25%, driven by the broader market opportunity and the demand for Snowflake's innovative solutions in data engineering and AI/ML.

Snowflake's F1Q26 product revenue guidance of $957.5 million, reflecting a year-over-year growth of 21.5%, fell short of consensus expectations, indicating potential challenges in achieving revenue targets. Despite improving margins, the company's consistent GAAP net losses and lack of profitability may contribute to downward pressure on the stock, especially amid growing concerns over macroeconomic conditions and investor sentiment towards high-growth technology stocks. Furthermore, the volatility introduced by Snowflake's consumption-based revenue model, along with increasing competition in the cloud space, raises uncertainties about its future growth trajectory and sustainability in maintaining a competitive edge.