This Magnificent Artificial Intelligence (AI) Stock Has Jumped 47% in 3 Months, and It Can Soar Even Higher
Snowflake stock has recovered impressively in the past three months, and a potential acceleration in the company's growth on account of its AI services could lead to more upside.
Snowflake's large customer base and the size of its addressable market suggest that this cloud stock is built for growth.
10 stocks we like better than Snowflake ›
Snowflake (NYSE: SNOW) stock has been on a terrific run in the past three months, gaining a remarkable 47% in such a short period of time owing to the broader recovery in tech stocks, which were under pressure amid tariff and other geopolitical concerns.
Importantly, Snowflake's recent rally is quite deserving since the company's growth profile has been improving thanks to its artificial intelligence (AI)-focused data cloud tools. Customers have traditionally used Snowflake's data cloud to securely store and consolidate data into a single platform, and then use that data for generating analytical insights or building applications.
AI has opened up a new growth opportunity for Snowflake. The AI-specific business model that Snowflake has adopted could help it clock outstanding growth in the long run.
Snowflake's AI products are giving it a two-pronged boost
Snowflake's push into AI began last year, when the company unveiled its Cortex platform that gave customers access to popular large language models (LLMs) so that they can build and deploy custom applications. Since then, the company has been aggressively adding new AI tools and features to help customers build AI agents and conversational assistants, and access both data with natural language prompts.
It is worth noting that Snowflake already had a solid customer base before it started rolling out AI tools. It had just under 9,500 customers at the end of fiscal 2024 (ended Jan. 31, 2024). The company, therefore, had a large number of customers to whom it could cross-sell its AI solutions. The good part is that Snowflake seems to be succeeding on that front.
This is evident from the 124% net revenue retention rate that the company reported in the first quarter of fiscal 2026 (ended April 30, 2025). Snowflake calculates this metric by dividing its product revenue from customers at the end of a quarter by the product revenue from that same customer cohort in the year-ago period. So, a reading of more than 100% is an indication that its existing customers are using more services from the company or have extended the usage of their current offerings.
Apart from the cross-selling opportunity, Snowflake's AI products are allowing it to bring more customers into its fold. This is evident from the 19% year-over-year growth in Snowflake's customer base in the previous quarter to almost 11,600. The company says 5,200 of its customers are using its AI and machine learning (ML) solutions.
As Snowflake continues to launch more AI features through its product development moves or by way of acquisitions, it should be able to convert a bigger chunk of its $342 billion projected end-market opportunity by 2028 into revenue. Moreover, the company's ability to win more business from existing customers should lead to an improvement in its earnings power.
The company's growth is likely to accelerate
Snowflake's product revenue in the previous quarter was up by 26% year over year. However, its remaining performance obligations (RPO) increased at a much faster pace of 34% to $6.7 billion.
RPO is the total value of a company's unfulfilled contracts at the end of a quarter, and the faster growth in this metric as compared to the actual top-line growth means that Snowflake is getting more contracts than it is fulfilling.
As a result, don't be surprised to see an acceleration in the company's revenue growth going forward, and that should translate into an uptick in its bottom-line growth.
It won't be surprising to see Snowflake stock being rewarded with more upside on the market because of its improved earnings power, which is why growth-oriented investors can still consider buying it. Its massive addressable market could pave the way for years of terrific growth.
Should you invest $1,000 in Snowflake right now?
Before you buy stock in Snowflake, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Snowflake wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $652,133!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,056,790!*
Now, it's worth noting Stock Advisor's total average return is 1,048% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of July 15, 2025
Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Snowflake. The Motley Fool has a disclosure policy.
This Magnificent Artificial Intelligence (AI) Stock Has Jumped 47% in 3 Months, and It Can Soar Even Higher was originally published by The Motley Fool
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
11 minutes ago
- Yahoo
The Democratic Party's Brand Is Cooked
Voters have increasingly little faith in the Democrats, a new Wall Street Journal poll found, with the party reaching its lowest favorability rating in more than three decades. Voters overwhelmingly believe that Republicans are better able to handle key issues in Congress than Democrats. The survey found that the majority of voters, 63 percent, have an unfavorable view of the Democratic Party. Only 33 percent hold a favorable view. This is the most unpopular that Democrats have been according to Journal polls dating back to 1990. As President Donald Trump enacts an increasingly authoritarian agenda and provides little economic benefit to the average American, Democrats are hopeful anti-Trump backlash will give them a strong showing in the 2026 midterm election. While slightly more people expect to vote for Democrats next year than Republicans, according to the Journal poll, Democrats' overall favorability has only dropped since Trump took office. 'The Democratic brand is so bad that they don't have the credibility to be a critic of Trump or the Republican Party,' John Anzalone, a Democratic pollster who worked on the survey, told the Journal. 'Until they reconnect with real voters and working people on who they're for and what their economic message is, they're going to have problems.' Anzalone's firm, which consulted for both President Joe Biden and Vice President Kamala Harris' presidential campaigns, worked on the survey with Trump pollster Tony Fabrizio. According to the survey, voters think Republicans in Congress are more capable at handling the economy, inflation and rising prices, tariffs, immigration, 'illegal' immigration, the Russia-Ukraine war, and foreign policy. On the topic of 'illegal' immigration, 48 percent have their faith in Republicans and 24 percent choose Democrats. Democrats scored higher on health care and vaccine policy. Both parties tied at 37 percent on the issue of looking out for middle class families. 'As much as I fully believe that Democrats are not doomed for all eternity, I also believe that many Democrats aren't quite grappling with the serious credibility problems the party still faces,' Democratic operative Tré Easton posted on X. 'The podcasts and everything are real cute, but we've got work to do.' Democrats also scored low in a Quinnipiac poll released earlier this month. In that survey, approval of congressional Democrats reached a new low of 19 percent, with 72 percent of voters saying they disapproved. 'This is a record low since March 2009 when the Quinnipiac University Poll first began asking this question of registered voters,' the university wrote. The Quinnippiac poll found that even registered Democrats disapproved of the party: Thirty-nine percent approved of how Democrats in Congress were handling their jobs, while 52 percent disapproved. Among registered Republicans, 77 percent approved of how Republicans are operating in Congress. In the findings from the Journal, voters are mixed on Trump. About half, or 55 percent, of voters say the country is headed in the wrong direction. This is down from 70 percent in January, meaning voters have become more optimistic since Trump took office, yet Trump is not wildly popular. He has a favorability rating of 45 percent, and an unfavorability rating of 52 percent. A total of 46 percent approve of what Trump is doing as president, and 52 percent disapprove. Fifty-three percent disapprove of Trump's handling of the economy, while 44 percent approve. On the issues of inflation, tariffs, immigration, looking out for middle class families, health care, vaccine policy, foreign policy, and the Russia-Ukraine war, voters disapprove of the job Trump is doing. On the topic of 'illegal' immigration, though, 51 percent approve and 49 percent disapprove. The Republican Party is not wildly popular either, though, with 54 percent of voters having an unfavorable view, compared to the 43 percent who have a favorable view. More from Rolling Stone Trump Claims Someone May Have Forged His Signature on Birthday Letter to Epstein I Worked With Stephen Colbert. Here's Why His Cancellation Should Scare You Yes, America Is an Oligarchy Best of Rolling Stone The Useful Idiots New Guide to the Most Stoned Moments of the 2020 Presidential Campaign Anatomy of a Fake News Scandal The Radical Crusade of Mike Pence
Yahoo
11 minutes ago
- Yahoo
Blues Have Big Move To Make With Breakout Forward
The St. Louis Blues' decision to tender an offer sheet to forward Dylan Holloway this past off-season undoubtedly proved to be a great decision. After the Edmonton Oilers elected not to match the Blues' two-year, $4,580,914 offer sheet for Holloway, he broke out in a major way in his first season with St. Louis.
Yahoo
11 minutes ago
- Yahoo
B.C.'s independent wood manufacturers decry retroactive U.S. softwood duties
VANCOUVER — British Columbia's independent wood product makers say hundreds of small- and medium-sized manufacturers may be forced to shut down in light of the latest decision from the United States to raise anti-dumping duties on Canadian softwood. The province's Independent Wood Processors Association says in a release that the U.S. Commerce Department's decision this week to raise duties also includes a requirement for Canadian companies to retroactively remit duties for products shipped to the United States since Jan.1, 2023. Association chair Andy Rielly says in a statement that the requirement to pay duties on products shipped in the last 31 months could not only force small B.C. producers to shut down, but may also threaten operators' personal assets as they may have to risk using their homes as collateral to secure bonds to pay. Rielly is urging the Canadian government to create support programs to make sure B.C.'s independent wood processors can keep workers employed and their companies running. The U.S. Commerce Department said earlier in the week it will raise anti-dumping duties on Canadian softwood to 20.56 per cent, drawing the ire of several B.C. industry groups such as the B.C. Council of Forest Industries and the B.C. Lumber Trade Council. The Independent Wood Processors Association says the the "all-others" rate affecting its members will be raised from 14.4 per cent to 27.3 per cent, with the possibly of another increase "in the coming weeks" potentially pushing the duties for their products to as high as 35 per cent. 'Until the Canadian government can negotiate a settlement to this long-festering dispute, we need a government support program to keep our workers employed,' Rielly says, adding an overall duty of 35-per-cent would force members to pay retroactive duties of 27 per cent on products already shipped. Association executive director Brian Menzies describes independent wood product producers as "collateral damage" in the trade war, and says the only hope they have of avoiding the hit is either "a favourable appeal from the Canada-US-Mexico Agreement" or "pursuing a bilateral negotiated resolution." 'We should not face export taxes or quotas," Menzies says. "Our raw materials are not subsidized, and we are too small to 'dump' our products in the U.S. market. "We acquire logs and lumber at 'arm's length' from various suppliers on the open market, just like claims made by members of the U.S. Lumber Coalition, and yet our Canadian companies along with U.S. consumers must pay these unfair and costly duties.' Prime Minister Mark Carney had previously said that a future U.S.-Canada trade deal could include softwood lumber quotas. This report by The Canadian Press was first published July 26, 2025. Chuck Chiang, The Canadian Press Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
