Snowflake (SNOW) Gains 4% Ahead of Earnings as Cortex AI Adoption Drives Bullish Bets

Shares of Snowflake rose more than 4% Friday to close at $172.20 as investors positioned ahead of the company’s highly anticipated fiscal Q1 2027 earnings report on May 27.

The rally comes after a difficult year for the cloud data platform company. Snowflake stock remains down roughly 22% year-to-date and nearly 39% below its 52-week high near $281.

Still, Wall Street sentiment is turning increasingly constructive as Snowflake pushes deeper into enterprise AI infrastructure, data intelligence, and government cloud modernization.

AI Workloads Are Becoming Snowflake’s Core Growth Driver

The biggest focus heading into earnings is artificial intelligence consumption growth.

Analysts increasingly view Snowflake as one of the clearest enterprise beneficiaries of rising AI data workloads.

Consensus estimates currently expect:

• EPS of $0.32
• Revenue of roughly $1.32 billion
• Revenue growth near 27% YoY
• EPS growth around 33% YoY

The options market is pricing in roughly a 13.5% move following earnings, signaling elevated expectations and volatility risk.

Several Wall Street firms remain bullish.

Analyst Targets

• TD Cowen: $255 target
• Benchmark: $200 target
• KeyBanc: Overweight, $200 target
• Street average target: ~$224

Most bullish analysts believe Snowflake’s AI platform strategy is still in the early innings.

Cortex Code and Snowflake Intelligence Are Reshaping the Narrative

A major part of the bull case centers around Snowflake’s newer AI offerings.

CEO Sridhar Ramaswamy recently highlighted rapid adoption of:

• Cortex Code
• Snowflake Intelligence
• Observe
• Snowpark
• Machine learning workloads

Cortex Code, internally nicknamed “CoCo,” is Snowflake’s AI coding and automation platform designed to simplify AI application deployment across enterprise data environments.

Management claims Cortex Code dramatically reduced deployment times from months to days.

Ramaswamy described adoption internally as “an explosion of capabilities.”

Snowflake Intelligence, which allows business users to interact with enterprise data using natural language, reportedly expanded to nearly 2,500 accounts within just three months.

The company says more than 9,000 customers are already using AI-related Snowflake tools.

Enterprise Spending Remains Strong, Supports SNOW Stock

Despite broader software spending concerns, Snowflake continues landing major enterprise deals.

The company reported:

• Remaining performance obligations (RPO) reached $9.8 billion
• RPO grew 42% year-over-year
• One deal exceeded $400 million
• Seven additional nine-figure enterprise contracts were signed

Those metrics suggest existing customers continue expanding workloads on the platform.

TD Cowen analysts also cited:

• Strong cloud warehouse consumption
• Competitive customer migrations
• Accelerating Snowpark adoption
• Growing machine learning demand

as major growth drivers heading into earnings.

Federal Government Expansion Adds Another Catalyst

Snowflake also recently secured a major agreement with the U.S. General Services Administration (GSA).

The OneGov partnership allows federal agencies to access Snowflake’s AI Data Cloud platform at discounted rates, supporting broader U.S. government modernization efforts.

The federal deal could become increasingly important as governments expand AI infrastructure spending.

Ramaswamy described Snowflake as:

“The only multi-cloud data platform that can meet this charge on day one.”

The agreement may also strengthen Snowflake’s credibility in regulated enterprise markets.

The Core Debate: AI Platform or Slowing Data Warehouse Business?

The debate around Snowflake increasingly centers on whether AI can reignite sustained high-growth expansion.

Bulls Believe:

• AI workloads are accelerating consumption
• Cortex Code expands use cases
• Enterprise AI adoption remains early
• RPO growth signals strong demand visibility
• Government expansion opens new markets

Bears Argue:

• Hypergrowth is over
• Cloud hyperscalers are intensifying competition
• AI products currently carry lower margins
• Snowflake still generates GAAP losses
• Valuation remains aggressive

The company’s AI products currently operate at lower gross margins than traditional analytics workloads, creating near-term profitability pressure.

Management is guiding approximately 75% product gross margin for FY2027.

SNOW Technical Analysis: Snowflake Is Attempting a Recovery Breakout

Technically, Snowflake’s chart is improving after months of underperformance.

Key Technical Signals

• Shares gained over 4% in one session
• Stock remains roughly 22% below January levels
• Volume improved ahead of earnings
• Momentum indicators have strengthened
• AI optimism is driving renewed institutional interest

The stock is attempting to reclaim key medium-term moving averages after a prolonged consolidation phase.

RSI and MACD

• RSI has improved toward bullish territory
• MACD recently turned positive
• Momentum is stabilizing ahead of earnings
• Post-earnings volatility risk remains very high

Key Support and Resistance Levels

A breakout above $180 could trigger a stronger recovery rally toward the $200 region. However, disappointing guidance or weaker AI consumption metrics could quickly reverse momentum.

Long-Term Outlook: Snowflake Wants to Become an AI Data Operating System

Snowflake’s long-term ambition is evolving beyond cloud data warehousing.

The company increasingly aims to become:

• An enterprise AI operating layer
• A multi-cloud AI data platform
• An AI application infrastructure provider
• A large-scale enterprise data ecosystem

Its consumption-based business model could become highly attractive if AI workloads continue scaling rapidly across enterprise customers.

The long-term bull thesis increasingly depends on three factors:

• AI consumption acceleration
• Expanding enterprise data workloads
• Margin improvement as scale increases

If Snowflake successfully monetizes Cortex Code, Snowflake Intelligence, and broader AI infrastructure adoption, the company could reaccelerate growth meaningfully over the next several years.

But execution risks remain elevated.

Competition from hyperscalers, AI margin dilution, and slowing enterprise software budgets could still pressure the stock if AI monetization takes longer than investors expect.

For now, however, Wall Street appears increasingly willing to give Snowflake another chance to prove it can become one of the defining enterprise AI platforms of the next decade.