Cloud company Snowflake, despite underperforming in the stock market, is focusing on AI to drive customer spending. While its first-quarter results fell short of investor expectations, a closer look reveals potential opportunities. Snowflake's revenue for Q1 grew 33% YoY, surpassing estimates, but adjusted earnings decreased by 6%. The company plans to invest in AI infrastructure, purchasing GPUs to develop AI-focused services and attract new customers. Snowflake is targeting the AI-as-a-service market, which is predicted to generate $72 billion in revenue by 2029.

Its customer count increased 21%, with more customers spending over $1 million, leading to a 128% dollar-based net retention rate. Snowflake's remaining performance obligations (RPO) increased 46% YoY to $5 billion, indicating an improved future revenue pipeline. The company has raised its full-year product revenue guidance to $3. 3 billion. Savvy investors may see Snowflake's underperformance as an opportunity for growth driven by AI.