Snowflake Inc. (SNOW) stock has jumped nearly 33% in the past six months, performing much better than the overall tech market. This strong performance has led investors to wonder if the company can keep this trend going.
The recent rise in stock price is likely due to solid business fundamentals and a growing market presence. Snowflake’s customer base increased significantly, reaching 11,159 by January 2025, up from 9,384 the year before.
The company now serves 745 Forbes Global 2000 companies, which represent 45% of its $3.6 billion revenue for fiscal 2025. Customer loyalty is high, with a net revenue retention rate of 126%. The number of customers bringing in over $1 million annually also grew, rising from 455 to 580.
Snowflake’s growth is supported by its expanding product offerings in artificial intelligence and machine learning. Features such as Apache Iceberg integration and the Cortex AI platform enhance engagement, with more than 4,000 customers using Snowflake’s AI/ML tools each week.
This momentum helped Snowflake achieve strong fourth-quarter results for fiscal 2025, with revenue increasing by 27% year-over-year to $986.8 million, surpassing expectations.
However, some investors are concerned about the stock’s high valuation. Snowflake trades at a forward price-to-sales ratio of 11.2, which is more than double the industry average of 4.8. This has led Zacks Investment Research to give the stock a “Value Score” of F, signaling that it may be overvalued based on traditional measures.
Despite this, analysts mostly remain optimistic about Snowflake’s future. Out of 42 analysts, most rate the stock as a “Buy,” with an average target price around $197, suggesting potential growth. Some predictions are even more positive long-term, forecasting steady growth through 2030 due to expansion in the data cloud market and its consumption-based revenue model.
Short-term predictions, however, vary, with some analysts expecting possible drops before growth resumes.
Looking ahead, Snowflake predicts continued growth, estimating fiscal 2026 revenue at about $4.44 billion, a 22.5% increase, and earnings per share of $1.15, a 38.6% increase. The company works in the rapidly growing cloud computing market, which is expected to expand significantly.
While it faces competition from major players like Amazon and Google, Snowflake’s strong products, increasing customer base, and focus on AI put it in a good position.
Investors will consider the company’s strong growth potential and expanding AI capabilities alongside its high valuation and market uncertainties as they evaluate whether the stock can keep rising.