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Investing.com - Macquarie has raised its price target on Snowflake Inc. (NYSE:SNOW) to $235.00 from $210.00 while maintaining a Neutral rating following the company’s second-quarter earnings beat. Currently trading at $243.75, Snowflake commands a market capitalization of $81.6 billion. According to InvestingPro data, analyst targets for the stock range from $170 to $440, reflecting diverse views on the company’s valuation.
Snowflake reported product revenue of $1,090 million, representing 32% year-over-year growth, which accelerated from 26% in the first quarter and exceeded consensus estimates by $47 million. The company’s remaining performance obligations reached $6,932 million, up 33%, while net revenue retention improved to 125%, up one percentage point from the previous quarter. InvestingPro analysis shows the company maintaining strong momentum with a 28.4% revenue growth over the last twelve months, though it currently appears overvalued according to InvestingPro’s Fair Value assessment.
The data cloud company posted a non-GAAP operating margin of 11.1%, approximately 260 basis points above consensus expectations, though trailing twelve-month free cash flow margin continued to decline. Management raised its fiscal year 2026 product revenue guidance by $70 million, exceeding its second-quarter outperformance of $50 million relative to the high end of previous guidance. InvestingPro data reveals the company maintains a healthy financial position with a "Fair" overall health score, despite not being profitable in the last twelve months.
Macquarie attributed the strong performance primarily to increased consumption in Snowflake’s core analytics business, as large customers migrated new workloads to the platform. The firm noted that management’s updated guidance incorporated the higher consumption levels as a baseline but did not assume continued heightened migration activity seen in the second quarter.
The company highlighted its Cortex AI initiatives and integration of Crunchy Data’s Postgres capabilities into the Snowflake platform, reporting that artificial intelligence influenced nearly 50% of new customer acquisitions in the second quarter. Macquarie indicated that while Snowflake’s AI strategy appears promising, current monetization of AI-related usage remains minimal.
In other recent news, Snowflake Inc . has seen multiple analyst firms raise their price targets following its strong fiscal second-quarter performance. Piper Sandler increased its price target to $285, citing a significant acceleration in product growth, driven by both core consumption and new artificial intelligence developments. TD Cowen also raised its target to $275, highlighting a 32% growth in the second quarter, along with improvements in revenues and customer spending. KeyBanc echoed this sentiment by setting a $275 target, noting a 130% year-over-year increase in net new product revenue. Bernstein SocGen Group adjusted its target to $221, pointing to better-than-expected Q2 earnings and a 33% growth in customer revenue performance obligations. Cantor Fitzgerald set its price target at $275, emphasizing that Snowflake exceeded its guidance by $50 million, marking a significant achievement for the company. These developments reflect a positive outlook from analysts based on Snowflake’s recent financial performance and strategic growth.
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