Snowflake (SNOW) Stock Forecast & Price Target

Snowflake has demonstrated robust growth fundamentals, with New Annual Recurring Revenue (ARR) increasing by 11% year-over-year and a notable uptick in high-value customers, now totaling 580 who each contribute over $1 million in product revenue annually, reflecting a 7% sequential growth. The company's Remaining Performance Obligation (RPO) surged 33% year-over-year to $6.9 billion, indicating strong future revenue visibility, alongside positive trends in product revenue, which exceeded expectations by 3-4% in the latest quarter. Management anticipates greater than 25% product revenue growth and free cash flow generation, driven by market expansion opportunities, improving business momentum, and the appeal of new product offerings such as Data Engineering, Snowpark, and artificial intelligence/ machine learning capabilities.

Snowflake's F1Q26 product revenue guidance of $957.5 million, representing a 21.5% year-over-year increase, fell slightly short of consensus expectations, indicating potential weaknesses in growth momentum amidst broader market challenges. The company's history of GAAP net losses and the lack of profitability suggest ongoing financial strain, compounded by the inherent volatility introduced by its Consumption model, which contrasts with more stable Subscription models. Additionally, as competitors enhance their cloud offerings, Snowflake risks losing its first-mover advantage in the data warehouse sector, which could further pressure its market position and stock performance.