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Snowflake (NYSE:SNOW) may have just hit its biggest milestone yetcrossing $1 billion in quarterly revenue for the first time. The company reported $1.04 billion in Q1 sales, up 26% from last year, with adjusted earnings landing at 24 cents a share. Thats ahead of Wall Street estimates, which had pegged revenue at $1 billion and EPS at 20 cents. Core product revenue, which includes data storage and compute, came in strong at $996.8 millionalso beating forecasts. Shares surged nearly 11% at 12.25am today.
But its the outlook that really caught investor attention. Snowflake now expects Q2 product revenue between $1.035 billion and $1.04 billion, comfortably above the $1.02 billion consensus. Full-year guidance was also bumped up to $4.33 billion. That signals strong momentum, especially in a choppy macro environment where enterprise budgets are under scrutiny. SNOW is now up 28.7% year-to-date, significantly outperforming the broader S&P 500 (SPY)
Whats driving all this? Quietly, AI might be doing more of the heavy lifting than anyones admitting. Snowflake benefits when enterprises ramp up compute usageand many are doing just that as AI integration spreads. Thats part of a bigger wave lifting the entire software sector. ServiceNow (NYSE:NOW), SAP (NYSE:SAP), Microsoft (NASDAQ:MSFT) and Monday.com (NASDAQ:MNDY) have all reported stronger-than-expected demand. So while macro clouds still hang overhead, Snowflake could be riding a much bigger structural trendand its just starting to show up in the numbers.
This article first appeared on GuruFocus.