SnowflakeSNOW shares have soared 17.6% in one month, outperforming the Zacks Computer and Technology sector’s growth of 2.9% and the Zacks Internet Software industry’s increase of 0.8%. The outperformance in SNOW stock is driven by its strong portfolio and an expanding partner base.
The company also benefits from strong adoption and increasing usage of its platform, as reflected by the net revenue retention rate of 125% in the second quarter of fiscal 2026.
Snowflake reported 19% year-over-year growth in the number of customers, reaching 12,062 in the second quarter of fiscal 2026. The company now has 654 customers with trailing 12-month product revenues greater than $1 million and 751 Forbes Global 2000 customers.
SNOW Stock’s Performance
Image Source: Zacks Investment Research
SNOW’s Expanding AI Partnerships Drive Growth
SNOW’s strong partner base, which includes major players like MicrosoftMSFT, Amazon’sAMZN cloud computing platform Amazon Web Services (AWS), NVIDIA, Meta Platform, ServiceNow, Fiserv, EY, LTMindtree, Next Pathway, and S&P Global, has been a significant growth driver of its success.
Snowflake’s collaboration with OpenAI, Anthropic, and Microsoft Azure is expanding its reach and enhancing its AI capabilities. Microsoft Azure was the fastest-growing cloud for Snowflake, with 40% year-over-year growth in the second quarter of fiscal 2026.
Snowflake recently expanded its presence in South Africa with the launch of its AI Data Cloud on Amazon’s AWS Africa (Cape Town) Region, giving businesses the ability to meet local data residency requirements while leveraging AI-driven insights. This deployment, powered by Snowflake’s long-term partnership with Amazon’s cloud computing platform AWS, enables organisations to unlock innovation, ensure compliance, and drive digital transformation across the region.
SNOW Benefits From Expanding Portfolio
Snowflake’s expanding portfolio has been noteworthy. Products like Apache Iceberg and Hybrid tables, Polaris, Cortex Large Language Model, and ML functions are helping Snowflake win new clients.
Building on this momentum, in June 2025, Snowflake unveiled SnowConvert AI and Cortex AISQL, solutions that modernize analytics and accelerate data migration. SnowConvert AI streamlines legacy platform migrations, reducing costs and timelines. Cortex AISQL empowers analysts to query structured and unstructured data using SQL and generative AI, delivering up to 60% cost savings and transforming every analyst into an AI-powered decision-maker.
Further expanding its portfolio, the company launched approximately 250 new capabilities in the first half of fiscal 2026, including Snowflake Intelligence, Cortex AI SQL, Gen2 warehouses, Snowflake Postgres, and Snowflake OpenFlow. These innovations simplify data management, enhance performance and enable AI-driven insights.
Snowflake’s investments in artificial intelligence and machine learning, including the introduction of Cortex AI and its integration with models from OpenAI and Anthropic, drove customer engagement. In the second quarter of fiscal 2026, the company announced that more than 6,100 customers are using Snowflake’s AI and ML technology weekly.
SNOW Offers Positive 3Q25 Guidance
Snowflake’s rich partner base, expanding clientele, and an innovative portfolio are expected to drive the company’s top-line growth.
For the third quarter of fiscal 2026, Snowflake expects product revenues in the range of $1.125-$1.13 billion. The projection range indicates year-over-year growth between 25% and 26%. The operating margin is expected to be 9% for the fiscal third quarter.
The Zacks Consensus Estimate for third-quarter fiscal 2026 revenues is currently pegged at $1.18 billion, indicating 25.27% year-over-year growth. The consensus mark for earnings is currently pegged at 31 cents per share, which has increased by a couple of pennies over the past 30 days. This suggests an increase of 55% year over year.
Snowflake Inc.’s Price and Consensus
Snowflake Inc. price-consensus-chart | Snowflake Inc. Quote
Snowflake Suffers From Stiff Competition
Despite SNOW’s expanding clientele and robust portfolio, the company is facing stiff competition from the likes of AlphabetGOOGL in the AI Data Cloud space. Alphabet, through its respective cloud platform, Google Cloud, offers compelling solutions that directly compete with Snowflake’s offerings.
Alphabet is growing its presence in the cloud analytics market with its cloud computing platform, Google Cloud’s BigQuery, a powerful serverless data warehouse solution.
Alphabet is also benefiting from its partnership with NVIDIA in the cloud. Google Cloud was the first cloud provider to offer NVIDIA’s B200 and GB200 Blackwell GPUs and will be offering its next-generation Vera Rubin GPUs.
SNOW Trading at a Premium
Snowflake shares are currently overvalued, as suggested by its Value Score of F.
The SNOW stock is trading at a premium with a forward 12-month Price/Sales of 14.42X compared with the Internet Software industry’s 5.73X.
Price/Sales (F12M)
Image Source: Zacks Investment Research
What Should Investors Do With SNOW Stock?
Despite SNOW’s robust portfolio, stiff competition from hyperscale cloud providers remains a headwind. Elevated infrastructure spending, particularly on GPUs to support AI-driven initiatives, is adding to cost pressures. Stretched valuation also remains a concern.
SNOW currently carries a Zacks Rank #3 (Hold), suggesting that it may be wise to wait for a more favorable entry point in the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
