Snowflake stock is rising due to strong earnings report and revenue growth, fair valuation

From Nasdaq: 2025-05-25 04:40:00

Snowflake (NYSE: SNOW) shares are on the rise, up about 32% on the year and nearly 57% since April, following a strong fiscal Q1 earnings report and increased guidance. The company saw 26% YOY revenue growth, surpassing $1 billion in quarterly revenue for the first time. Snowflake’s Cortex AI platform has been successful, with over 5,200 accounts using its AI capabilities weekly. The company added 451 net new customers in Q1, showing strong growth. While the stock is not a bargain, its valuation seems fair for a SaaS company with high gross margins and revenue growth.

Snowflake is adapting to AI disruptions by expanding its services and adding new customers while retaining existing ones. The company’s AI platform and new products are driving revenue growth. With a forward P/S multiple of over 12x, the stock is not undervalued but seems fairly priced for its growth potential. Snowflake’s ability to leverage AI for business growth will be key to sustaining its success. The Motley Fool Stock Advisor team has identified other top stock picks for investors, although Snowflake was not included in their list of 10 best stocks.



Read more at Nasdaq: Snowflake Stock Is Soaring — But Is It Too Late to Jump In?