Is Snowflake the New Market Darling of AI Software -- or Will It Follow Palantir's Path?

1 week ago 16

Harsh Chauhan, The Motley Fool

Thu, June 4, 2026 astatine 10:18 AM CDT 5 min read

Snowflake (NYSE: SNOW) banal was down successful the dumps until May 27 this year, but a coagulated acceptable of results for the archetypal 4th of fiscal 2027 (which ended connected April 30) sent it skyrocketing the pursuing day.

Snowflake banal surged a whopping 36% connected May 28, arsenic it beat Wall Street's expectations and raised its full-year gross and net guidance. The banal -- which had mislaid 19% of its worth successful 2026 earlier the merchandise of its fiscal Q1 results connected May 27 -- seems to person go the caller darling of the artificial quality (AI) bundle space.

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That's not surprising, arsenic Snowflake's AI concern is taking off. The institution operates a cloud-based information platform, which helps customers store and analyse some structured and unstructured data. Snowflake's level besides enables customers to stock data, deduce analytics and insights from their proprietary data, and physique applications, among different usage cases.

As Snowflake has been offering AI bundle tools to its customers to get much retired of their data, it is casual to spot wherefore it is anticipating faster growth. However, is it a bully thought to bargain this AI banal pursuing its latest results? Or volition it conscionable the aforesaid destiny arsenic Palantir Technologies (NASDAQ: PLTR), a banal that has slipped substantially this twelvemonth contempt delivering phenomenal growth?

Let's find out.

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AI is going to supercharge Snowflake's maturation

Snowflake's fiscal Q1 gross accrued 33% twelvemonth implicit twelvemonth to $1.39 billion. Its non-GAAP net per stock accrued by an awesome 62.5% twelvemonth implicit twelvemonth to $0.39. Snowflake absorption noted connected the latest net telephone that its wide lawsuit number accrued by 38% twelvemonth implicit twelvemonth to astir 14,000.

Snowflake notes that the adoption of its AI tools is expanding rapidly. It is worthy noting that 13,600 lawsuit accounts were utilizing its AI solutions past quarter, up from 5,200 successful the year-ago period. Even better, Snowflake's robust lawsuit maturation is accompanied by accrued spending by existing customers.

This is evident from the company's nett gross retention complaint of 126%. This metric, which is calculated by dividing the merchandise gross generated by Snowflake's customers successful a play by the spending by those aforesaid customers successful the year-ago period, expanded by a mates of percent points twelvemonth implicit year. A nett gross retention complaint of much than 100% means that Snowflake's existing customers are spending much wealth connected its offerings.

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