Snowflake Inc. shares rallied sharply in Tuesday morning trading, climbing 6.3% to $174.62 and outperforming major U.S. index funds, as Wall Street analysts highlighted robust demand for the company's artificial intelligence tools ahead of its fiscal first-quarter earnings report.
The stock reached an intraday high of $176.70, with trading volume surging to 3.6 million shares. Snowflake's market capitalization stood at approximately $59.4 billion, reflecting growing investor confidence in the cloud-data company's AI-driven growth story.
BofA Securities raised its price target on Snowflake to $205 from $195, maintaining a Buy rating. Analyst Koji Ikeda cited stronger execution and solid demand for the company's AI business intelligence offerings. Ikeda noted that the upcoming quarterly report is unlikely to alter BofA's positive outlook, as Snowflake continues to capture market share in the AI data analytics space.
Citizens analyst Patrick Walravens kept his Market Outperform rating and $325 price target unchanged, emphasizing Snowflake's strategic role across data engineering, analytics, AI, and applications. Walravens highlighted that Snowflake's tools maintain data permissions, governance, and security—key concerns for enterprises deploying AI solutions.
Snowflake is set to report fiscal first-quarter results after the U.S. market close on May 27, for the quarter ended April 30. Investors are keen to see whether AI-driven workloads are translating into actual paid usage rather than remaining at the demo stage. The company's product revenue will be a key focus, with management forecasting first-quarter fiscal 2027 product revenue between $1.262 billion and $1.267 billion, representing a 27% year-over-year increase. Snowflake maintained its full-year product revenue target at $5.66 billion.
In February, Snowflake CEO Sridhar Ramaswamy declared that the company "sits at the center of the enterprise AI revolution," while CFO Brian Robins emphasized a focus on stability and operational rigor. The company also landed its largest contract to date, valued at over $400 million, and announced two multi-year, $200 million deals with OpenAI and Anthropic.
Despite the optimism, analysts caution that Snowflake's business model remains tied to customer consumption patterns—any drop in usage immediately impacts revenue. AI could drive new business, but it might also cannibalize older software budgets. D.A. Davidson analyst Gil Luria noted in February that "investors are skeptical about all software companies right now."
Snowflake continues to post losses under generally accepted accounting principles (GAAP), and its price-to-earnings ratio remains negative. The key question for investors is whether management can match the pace of its AI push with consistent guidance and sustainable customer spending.
