Jim Cramer Notes Snowflake (SNOW) “Caught Fire in Recent Months”

Jim Cramer Notes Snowflake (SNOW) “Caught Fire in Recent Months”

Syeda Seirut Javed

Tue, September 22, 2026 at 11:42 PM GMT+3 3 min read

• SNOW -0.53%

While speaking about software platforms during the September 17 episode of Mad Money, Jim Cramer shared his recent takeaways from catching up with Snowflake Inc. (NYSE:SNOW), as he commented:

While we were out in San Francisco, I got a chance to catch up with Snowflake, the software company that gives customers a platform to store, use, and share their data, often with the goal of building AI applications. And compared to weakness, where the stock sold off thanks to AI displacement worries, Snowflake caught fire in recent months. The stock's up 185% from its April lows at this point in part because they've been putting up incredible numbers.

Product Revenue Growth Accelerates to 37% as AI Revenue Steps Up

Snowflake Inc. (NYSE:SNOW) delivered an exceptional second quarter for fiscal 2027 with product revenue reaching $1.49 billion, marking a 37% year-over-year increase. Total revenue climbed 35% to $1.55 billion while remaining performance obligations surged 30% to $9 billion, driven by strong consumption trends across core data cloud applications. The company also reported a net revenue retention rate of 126% along with an expanding base of 828 customers generating over $1 million in trailing twelve-month product revenue. The metrics show that enterprise adoption of artificial intelligence workloads is driving massive platform consumption rather than displacing software spending.

Valuation Multiples And Gross Margin Headwinds From AI Workloads

Nevertheless, Snowflake Inc. (NYSE:SNOW) continues to post GAAP net losses, reporting a net loss of $191.7 million for the quarter as high operating expenses and stock-based compensation weigh on profitability. Management also adjusted its fiscal 2027 non-GAAP product gross margin guidance downward to 74% because artificial intelligence workloads currently carry lower contribution margins than traditional data storage. The stock trades at an elevated forward multiple of 166.7x, leaving very little room for error if consumption growth slows or if heavy competition from hyperscalers squeezes pricing power.

Smart Money Backing And Bearish Float Dynamics

According to Insider Monkey tracking data, 103 hedge funds held positions in the company in the second quarter, up from 80 in the prior quarter. Among those funds, AQR Capital Management was the most prominent shareholder with 4.43 million shares. At the same time, Point72 Asset Management increased its position in the company by 2449%. The short interest accounts for 5.25% of the float, highlighting moderate skepticism among bearish traders monitoring high valuation multiples and ongoing GAAP net losses.

With remaining performance obligations reaching $9 billion and product revenue accelerating by 37%, Snowflake Inc. (NYSE:SNOW) seems to need to continue showing that its artificial intelligence workloads can scale efficiently enough to offset lower initial gross margins and justify its premium valuation in a competitive software landscape.

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