Snowflake (SNOW)’s Q1 Upside Likely Given Strong Checks And Ramping Cortex Code Adoption, Says RBC Capital

Snowflake Inc. (NYSE:SNOW), featuring a short float of 5.18% and upside potential of 52.60%, earns a spot on our list of the best cloud stocks to buy as Azure growth hits 40%.

On May 15, 2026, RBC Capital lowered its price target on Snowflake Inc. (NYSE:SNOW) to $220 from $245 while keeping an “Outperform” rating, as part of a broader research note previewing Q1 results across software names. The firm flagged a tricky but favorable setup, with Q1 upside likely given strong checks and ramping Cortex Code adoption that could result in no deceleration to modest acceleration in product revenue.

That analyst optimism is supported by the company’s FY27 outlook, issued alongside its most recent earnings.

Management guided Q1 product revenue of $1.262 billion to $1.267 billion, representing 27% year-over-year growth. For the full year, Snowflake Inc. (NYSE:SNOW) expects product revenue of approximately $5.66 billion, also reflecting 27% year-over-year growth, with the Observe acquisition contributing approximately 1 percentage point of that growth. Management guided FY27 non-GAAP product gross margin of 75%, non-GAAP operating margin of 12.5%, and non-GAAP adjusted free cash flow margin of 23%, the latter carrying an approximate 150 basis point headwind tied to the acquisition.

Meanwhile, Snowflake Inc. (NYSE:SNOW) deployed more than 430 product capabilities to market during FY26, with management citing continued strength in its core business and further growth in AI workloads as the basis for its outlook. The company ended the Q4 FY26 quarter with $4.8 billion in cash, cash equivalents, and short- and long-term investments combined, with $1.1 billion remaining under its repurchase authorization.

Snowflake Inc. (NYSE:SNOW) provides a cloud-based data platform that helps organizations store, manage, and share data across multiple public clouds. Its platform, called the Snowflake Data Cloud, supports diverse workloads including data engineering, analytics, machine learning, and secure collaboration.

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