NEW YORK, February 27, 2026, 11:42 EST — Regular session
- Snowflake dropped roughly 4%, giving back some of its post-earnings gains.
- Investors are showing caution on expensive software stocks, citing persistent inflation and questions around AI’s returns.
- Attention turns to usage patterns and what customers are signaling as the Snowflake Summit approaches in June.
Snowflake Inc. dropped roughly 4% Friday, surrendering some of Thursday’s gains after earnings, as tech stocks pulled back. Shares last changed hands at $166.00, off 4.1% as of 11:41 a.m. EST, having traded in a range of $165.36 to $171.52. The stock had climbed 2.3% the previous session. 1
Stocks are heading for their sharpest monthly decline in close to a year, with investors questioning lofty tech valuations and the returns on hefty AI investments. Against that setting, earnings have been met with sharper moves—even for companies that clear estimates. 2
Snowflake projected its fiscal 2027 product revenue to top Wall Street’s estimates late Wednesday and highlighted a landmark customer contract worth over $400 million. “Investors are skeptical about all software companies right now,” said Gil Luria, an analyst at D.A. Davidson. 3
Snowflake reported $1.28 billion in revenue for the quarter ended Jan. 31, according to its SEC filing. Product revenue, which comes from subscription usage, hit $1.23 billion, marking a 30% jump from last year. Net revenue retention landed at 125%, showing existing customers are spending more. Remaining performance obligations climbed 42% to $9.77 billion. CEO Sridhar Ramaswamy called Snowflake a company that “sits at the center of the enterprise AI revolution.” The fiscal 2027 outlook calls for product revenue of $5.66 billion. For the first quarter, Snowflake expects product revenue between $1.262 billion and $1.267 billion, with a non-GAAP operating margin target of 9% for Q1 and 12.5% for the full year; non-GAAP excludes items such as stock compensation. 4
The question is how quickly that demand actually becomes real consumption. Snowflake charges customers based on their actual storage and computing usage, so spending jumps around, tied to project timing, budget shifts, and how fast enterprises launch fresh tools.
Investors are tracking Snowflake’s ability to sharpen execution even as it piles on new features and integrates fresh acquisitions. The company is pushing harder on “agentic” tools—AI agents that act on users’ behalf—but Wall Street has shown little patience for delays in returns.
If customer usage falls short — or if expenses from AI tie-ups and integration start piling up — margins could get pinched right when investors are looking for bottom-line proof instead of blue-sky forecasts. Here’s the risk: the buzz around AI products doesn’t translate to actual workload, and usage numbers stay flat.
Macro’s a headwind here. January producer prices in the U.S. climbed past forecasts, fueling expectations that the Federal Reserve won’t cut rates until early summer—or later. That environment tends to weigh on long-duration growth names. 5
For the remainder of Friday, traders are eyeing Snowflake to see if it can hold above its session low, and whether volume remains robust as software stocks churn.
Snowflake Summit 26 lands in San Francisco June 1–4, drawing investor attention for fresh product reveals and customer feedback—both key to recalibrating next quarter’s outlook. 6
