There’s a version of Snowflake that investors used to argue about. The data warehousing company that grew too fast, lost money with no end in sight, and competed on a shrinking turf against Amazon, Google, and Microsoft all at once. That version still gets cited in bearish threads. But it’s increasingly hard to square with what the company is actually putting up.
Let’s start with the most recent quarter.
The Numbers Don’t Lie
In late May, Snowflake reported Q1 fiscal 2027 results that were, by most measures, among the strongest in the company’s history. Total revenue came in at $1.39 billion, up 33% year over year. Product revenue specifically grew 34% — beating consensus expectations. Non-GAAP operating margin came in at 12.5% (not 11.9%).
That last part matters more than people realize. Snowflake has been a company with great growth and a profitability story that always seemed to be arriving just over the horizon. Now the margin expansion is actually showing up in the numbers, not just the investor deck.
Non-GAAP diluted EPS came in at $0.39 — beating consensus. Full-year product revenue guidance was raised to approximately $5.84 billion, ahead of the pre-quarter consensus estimate of roughly $5.67 billion.
Slight tangent, but it matters: the stock ran up hard after the print, and then cooled off. Snowflake hit a 52-week high of $284.99 on June 1, 2026, and by the end of the month was trading in the high-$240s (it closed June 26, 2026 at $248.96). That gap between the business and the stock has become something worth paying attention to.
The AWS Deal Changes the Calculus
The most significant single announcement alongside earnings wasn’t a revenue line — it was a deal. Snowflake committed to a $6 billion, five-year cloud infrastructure spend on Amazon Web Services, including Graviton compute and AI infrastructure. That’s a strategic move that simultaneously deepens the AWS partnership and signals exactly where Snowflake sees its future: embedded in the infrastructure layer of enterprise AI, not just storing data above it.
CEO Sridhar Ramaswamy has been deliberately repositioning the company. The old framing was data cloud. The new one is agentic enterprise. Snowflake Intelligence, the company’s natural-language AI layer, more than doubled its account base quarter over quarter. Cortex Code (referred to as “CoCo” on the earnings call), which brings AI-assisted data engineering into the platform, is already in use across more than 7,100 accounts. These aren’t pilots — they’re production deployments.
What the Backlog Says
Remaining performance obligations — essentially contracted future revenue — stood at $9.21 billion at the end of Q1, up 38% year over year. That’s not a number that shows up in next quarter’s earnings. It’s a visibility metric. It tells you how much business is already committed, waiting to be recognized.
Net revenue retention held at 126%. Which means existing customers, on average, spent 26% more than they did a year ago. That’s the consumption model working exactly as designed.
The full picture, going back further: revenue grew from $592 million in fiscal 2021 to $4.68 billion in fiscal 2026 — nearly eightfold in five years.
The Bear Case Is Real, Just Smaller Than It Used To Be
Databricks is the obvious competitor. It’s pulling at the same enterprise data audience from a different architectural angle. Hyperscalers — AWS, Azure, GCP — continue bundling data tools that overlap with Snowflake’s core.
There’s also pricing pressure from the AI model cost wave hitting enterprise budgets. If customers tighten AI spend, consumption-based revenue can pull back faster than subscription models.
But here’s the thing. Snowflake now has a $9.21 billion RPO cushion, a deepened AWS relationship, and a product surface area that’s expanding well beyond storage and analytics. Analyst sentiment also remains constructive, though the exact counts and targets move constantly; as of late June 2026, one widely cited aggregation showed about 51 analysts with an average price target around $293.
That gap doesn’t close automatically. But the business is no longer the question mark it was. The agentic AI wave is creating a massive new appetite for exactly what Snowflake has spent years building.
Whether the stock reflects that in the next two quarters or two years is the actual bet here. Worth a closer look.
Disclaimer: This editorial is for informational purposes only and does not constitute investment advice. All data is sourced from company filings and publicly available reports. Past performance does not guarantee future results. Investors should conduct their own due diligence before making any investment decisions.
