New York, Feb 26, 2026, 18:26 EST — After-hours
- Snowflake dropped 1.9% in after-hours trading, wiping out a 2.3% gain from Thursday’s regular session.
- Fourth-quarter product revenue jumped 30%, while contracted backlog surged.
- Guidance beat forecasts, yet signaled growth is cooling, with investors zeroing in on AI demand and margins.
Snowflake Inc shares dropped 1.9% after the bell on Thursday, erasing some of their earlier advance as investors digested the company’s outlook alongside new AI-related deals.
These shifts are significant: Snowflake’s consumption-based setup means revenue tracks closely with customer activity. The stock often acts as a real-time indicator of corporate IT budgets—particularly now, as more firms shift workloads into AI projects.
Guidance and backlog now matter just as much as the quarter’s numbers. Investors are looking for clear signs that AI demand is driving genuine platform activity—not just generating hype and test runs.
Snowflake shares ended the session at $173.06, a 2.28% gain. After the bell, they slipped to $169.75. In regular trading, the stock moved between $167.20 and $184.42.
Fourth-quarter revenue hit $1.28 billion, according to a regulatory filing on Wednesday. Product revenue, the line most directly reflecting platform usage, climbed to $1.23 billion. Both figures marked a 30% jump from a year ago. Remaining performance obligations—contracted but unrecognized revenue—surged 42% to $9.77 billion. Net revenue retention clocked in at 125%. “The promise of AI became real,” CEO Sridhar Ramaswamy said. CFO Brian Robins cited 740 net new customers for the quarter. SEC
Snowflake is projecting fiscal 2027 product revenue of $5.66 billion, beating Wall Street’s consensus of $5.50 billion, though it’s guiding for product revenue growth to moderate at 27% for both Q1 and the full year, LSEG data show. CEO Ramaswamy told Reuters that more than 2,500 customers now use the company’s Snowflake Intelligence “agentic” platform—software that acts on users’ behalf—and mentioned Snowflake’s biggest contract yet, valued at over $400 million, but didn’t identify the client. D.A. Davidson’s Gil Luria said, “Investors are skeptical about all software companies right now.” Snowflake also revealed two separate multi-year $200 million deals with OpenAI and Anthropic, and confirmed a $600 million acquisition of app-monitoring platform Observe. Investing.com
The forecast’s slowdown takes the air out of the narrative. Snowflake might post solid results, yet shares could swing sharply—customers could clamp down on usage, or AI-related workloads might drive expenses above projections.
Traders are watching for evidence that these new partnerships actually drive consistent consumption. There’s also the question of whether the Observe integration might end up disrupting sales execution or pressuring margins.
Snowflake’s top brass are set to take the stage at the Morgan Stanley Technology, Media & Telecom Conference on March 3, with their presentation locked in for 4:05 p.m. PT. Investors will be watching for updates on AI demand, margin trends, and news on the Observe deal.
