Key Highlights
- Q1 FY2027 product revenue reached $1.334 billion, reflecting 33.9% annual growth and surpassing analyst estimates by 5.3%
- Cortex Code (CoCo), Snowflake’s AI solution, expanded to more than 7,100 customer accounts within months of its February 2026 launch
- HSBC elevated SNOW rating to Buy with a price target increase from $176 to $289
- Several Wall Street firms increased their price targets, with Monness, Crespi, Hardt reaching the highest at $320
- The company strengthened ties with AWS and OpenAI while revealing acquisition plans for AI startup Natoma
Snowflake (SNOW) shares climbed approximately 3.6% to trade near $239.20 following the release of fiscal 2027 first-quarter earnings that exceeded analyst projections for both top-line growth and profitability. The stock had already experienced a remarkable 39% surge during the week leading up to the earnings announcement.
The company’s Q1 product revenue totaled $1.334 billion, marking a 33.9% increase compared to the same period last year. This figure outperformed FactSet consensus estimates by 5.3%. Operating income exceeded projections by 35.2%.
The data cloud platform provider also elevated its full-year outlook and increased operating margin guidance by 100 basis points. The company maintained its FY2027 product gross margin forecast at 75%.
Much of the quarter’s momentum stemmed from robust adoption of Snowflake’s artificial intelligence offerings, particularly Cortex Code (internally referred to as CoCo). Since becoming broadly available in February 2026, the product has expanded to serve over 7,100 customer accounts.
Executives identified CoCo as the primary catalyst for raising full-year guidance. The rapid adoption trajectory for a product available less than half a year demonstrates strong market demand.
The company’s foundational data platform also experienced accelerated consumption patterns. Enterprises are migrating workloads to Snowflake more rapidly to enable controlled AI revenue implementations, simultaneously boosting both AI-specific revenue streams and core platform utilization.
Wall Street Firms Raise Price Targets
HSBC delivered the most significant rating change, elevating SNOW from Hold to Buy while increasing its price objective from $176 to $289. Analyst Stephen Bersey highlighted CoCo as the most compelling evidence of Snowflake’s AI monetization capabilities.
Monness, Crespi, Hardt established an even more bullish stance with a $320 target. Benchmark lifted its forecast to $270, pointing to unprecedented sequential dollar expansion. Cantor Fitzgerald assigned a $282 target. Truist Securities positioned at $275, while Freedom Broker projected $300.
This cluster of upgrades within a compressed timeframe signals that Wall Street is fundamentally reassessing Snowflake’s expansion potential.
Strategic Partnerships and M&A Activity
Snowflake revealed expanded collaborations with AWS and OpenAI, strengthening its footprint within the enterprise artificial intelligence infrastructure. The company also disclosed its intention to acquire Natoma, an AI-focused startup, though financial details remain undisclosed.
These strategic initiatives broaden Snowflake’s capabilities across the AI landscape—spanning both cloud infrastructure and practical AI application development.
Executives acknowledged potential headwinds during the earnings call. Escalating AI infrastructure costs and operational challenges associated with launching new products at scale were identified as monitoring priorities.
Snowflake continues to operate at a loss on a trailing twelve-month basis. Nevertheless, Wall Street analysts now project the company will achieve profitability during the current fiscal year, with consensus EPS estimates of $2.83 for FY2027.
InvestingPro noted that the stock may be trading above fair value at present levels, despite the impressive earnings performance and upgraded forward guidance.
Year-to-date, the stock has appreciated 9.04%, with the company commanding a market capitalization of roughly $60.75 billion based on recent trading data.
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