Snowflake Stock (SNOW) Surges Then Fades After Q4 Earnings Beat — AI Momentum Drives 30% Revenue Growth

Snowflake (NYSE: SNOW) delivered a strong fourth-quarter earnings beat on Wednesday, February 25, 2026 ET, sending SNOW stock surging more than 6% in after-hours trading before giving back a portion of those gains. The results confirmed accelerating AI-driven revenue growth but a volatile post-earnings reaction underscored the persistent tension between strong fundamentals and compressed software valuations.

Snowflake Stock Closes Up 5% Before Earnings, Jumps Again After

SNOW stock finished the regular session on February 25 up 5.06%, closing at $169.21 ET, after spending much of the year underwater. The stock had been hammered alongside the broader SaaS sector, falling roughly 26% year to date heading into the print. Shares had traded as low as $161 earlier in the week before buyers stepped in ahead of the quarterly report.

After the closing bell, Snowflake stock initially spiked toward $180 before pulling back. Late after-hours data showed the stock trading near $163 to $165 — a roughly 2% to 3% decline from the regular-session close — as investors weighed strong results against guidance that left some questions unanswered heading into fiscal year 2027.

SNOW Q4 Earnings: Revenue Up 30%, EPS Crushes Estimates

Snowflake reported total Q4 revenue of $1.28 billion, topping the Wall Street consensus estimate of $1.26 billion and representing 30% year-over-year growth — the company's strongest showing in several quarters. Product revenue came in at $1.23 billion, also up 30% year over year.

Adjusted EPS of $0.34 crushed the consensus estimate of $0.27, representing a 26% beat. Net income on a GAAP basis remained negative, but the company posted net revenue retention of 125%, meaning existing customers collectively grew their Snowflake spending by 25% over the prior year. The company ended the quarter with approximately $2.83 billion in cash and cash equivalents.

Remaining Performance Obligations Hit $9.77 Billion — Up 42%

The single most closely watched metric for Snowflake stock was remaining performance obligations, or RPO — the contracted but not yet recognized revenue pipeline that signals future business. Snowflake reported RPO of $9.77 billion, up a striking 42% year over year and well ahead of the $7.88 billion posted just last quarter.

That acceleration from 37% RPO growth in Q3 to 42% in Q4 was precisely the data point bullish analysts had pointed to as the clearest proof that AI-related enterprise demand was converting from pipeline into binding contracts. Snowflake added 740 new customers in the quarter — up 40% year over year — and ended with 733 customers generating more than $1 million in trailing 12-month product revenue.

FY2027 Guidance Calls for 27% Growth as AI Becomes a Revenue Driver

Snowflake guided for first-quarter fiscal 2027 product revenue of $1.26 billion to $1.27 billion, representing approximately 27% year-over-year growth. Full-year fiscal 2027 product revenue guidance is expected around $5.5 billion, consistent with the roughly 24% to 27% growth rate analysts had modeled.

CEO Sridhar Ramaswamy emphasized that Snowflake's AI transition is now generating real consumption revenue — not just pipeline. The company crossed a $100 million AI revenue run rate during Q3 and has since announced a $200 million partnership with OpenAI. Snowflake also reported that its platform processed consumption tied to over 7,300 accounts using AI features weekly. The company expects an adjusted operating margin of 9% for Q1 and 12.5% for the full fiscal year 2027.

Wall Street Has Slashed Snowflake Price Targets But Maintains Buy Ratings

Despite broadly bullish sentiment, analysts spent the weeks before earnings cutting their price targets on SNOW stock sharply. BTIG reduced its target from $312 to $235, TD Cowen from $300 to $270, Morgan Stanley from $299 to $270, Citigroup from $300 to $270, Stifel from $280 to $225, and Oppenheimer from $295 to $250. All maintained Buy or Outperform ratings, citing compressed software multiples rather than deteriorating fundamentals as the driver of the cuts.

Across 52 analysts covering Snowflake stock, 43 carry a buy-equivalent rating with a consensus price target of $266 — implying substantial upside from current levels. The broader challenge for SNOW is a market that has been brutal to enterprise software names in 2026, with the so-called "SaaSpocalypse" trade weighing on the entire sector regardless of company-specific execution.