Snowflake Inc (NASDAQ: SNOW) reported strong quarterly results late Tuesday, underscoring the resilience of software firms amid rising macroeconomic uncertainty and renewed tariff concerns.
The cloud-based data platform posted solid first-quarter numbers and issued bullish forward guidance, with management highlighting accelerating demand tied to AI adoption.
The earnings release reinforced the market’s view that artificial intelligence remains a dominant investment theme, overshadowing broader headwinds.
Including today’s rally, Snowflake stock is up roughly 50% versus its year-to-date low in April.
Is Snowflake’s valuation justified?
Despite a massive rally in recent weeks, the price-to-sales multiple on Snowflake shares suggests they could extend gains further in the months ahead.
At the time of writing, the NYSE-listed firm is going for less than 20 times its estimated sales for fiscal 2026, significantly below its average of more than 30 times over the past five years.
While that valuation is still not cheap per se, it’s reasonable for an AI company that’s growing at a fast clip, continues to hit profitability milestones, and remains on track to lower its stock-based compensation as well.
That said, SNOW stock remains unattractive for income investors, given it does not currently pay a dividend.
Deutsche Bank raises price target on SNOW shares
Following Snowflake’s earnings release, Deutsche Bank analyst Brad Zelnick raised his price target on the AI stock to $225, indicating another 12% upside from here.
“At the heart of the stock debate is Snowflake’s ability to attract Data Science and AI workloads to drive the next leg of growth beyond core business analytics. Q1 showed why they’re getting a seat at the table,” he told clients in a research note on Thursday.
Zelnick recommends owning SNOW shares also for the robust pace of product delivery. In its fiscal first quarter alone, the company brought over 125 products to the market.
That indicates a year-on-year growth of more than 100%. Note that Snowflake was a close to $400 stock in late 2021.
Should you invest in Snowflake after its Q1 earnings release
All in all, Snowflake stock remains worth owning despite a sharp rally since the first week of April, as it has a massive total addressable market.
Additionally, the company’s management is executing the AI strategy flawlessly, which could further help SNOW shares reclaim their all-time high in the coming years.
Investors should also note that Snowflake’s earnings call did not discuss the macro environment at length, which is rare for a tech company in 2025.
This further substantiates the narrative that SNOW stock could continue its upward trajectory irrespective of what lies ahead for the US economy.
Other Wall Street analysts are just as bullish on Snowflake Inc for the back half of 2025.
The consensus rating on SNOW currently sits at “overweight” with the average price target of $218, indicating another 10% upside from here.
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