SNOW Expands in Cloud Analytics: Is the Growth Thesis Strengthening?

Snowflake SNOW is benefiting from its strong position as a leader in cloud-based data analytics and AI-driven solutions, which is driving robust growth. In the second quarter of fiscal 2026, SNOW reported product revenues of $1.09 billion, up 32% year over year.

The company 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. The company reported 19% year-over-year growth in the number of customers, reaching 12,062 in the second quarter of fiscal 2026. SNOW now has 654 customers with trailing 12-month product revenues greater than $1 million and 751 Forbes Global 2000 customers.

Snowflake’s focus on AI integration, such as Cortex AI SQL and Snowflake Intelligence, further strengthens its analytics offerings by enabling enterprises to derive deeper insights and automate workflows.

Snowflake’s partnerships with major cloud providers, such as Microsoft Azure, are also driving growth in cloud analytics. Azure was the fastest-growing cloud for Snowflake in the second quarter of fiscal 2026, with 40% year-over-year growth, underscoring the company’s ability to integrate with cloud ecosystems and expand its global reach.

SNOW’s strong focus on the AI Data Cloud has been a key catalyst. The company recently announced a collaboration with Siemens to connect OT and IT data, enabling manufacturers to leverage AI-driven insights and enhance operational efficiency through the integration of Industrial Edge and Snowflake AI Data Cloud.

Snowflake Suffers From Stiff Competition

Snowflake faces stiff competition from the likes of Alphabet GOOGL and Datadog DDOG, which are also expanding their footprint in the cloud analytics space.

Alphabet is expanding its presence in the cloud analytics market with its cloud computing platform, Google Cloud’s BigQuery, a strong serverless data warehouse solution. Alphabet has been growing quickly in the booming cloud market. In the fiscal second quarter of 2025, Alphabet’s Google Cloud revenues rose 31.7% compared to the previous year, reaching $13.62 billion.

Datadog benefits from strong customer demand for offerings in modern observability, cloud security, software delivery, and cloud service management. In the second quarter of 2025, Datadog had 3,850 customers with an annualized run rate (ARR) of $100,000 or more, up from about 3,390 in the year-ago quarter. These customers generated about 89% of the total ARR.

SNOW’s Share Price Performance, Valuation and Estimates

Snowflake shares have appreciated 48.7% year to date, outperforming the broader Zacks Computer & Technology sector’s return of 22.4% and the Zacks Internet Software industry’s increase of 26.5%.

SNOW Stock's Performance

Snowflake stock is trading at a premium, with a forward 12-month Price/Sales of 14.79X compared with the Internet Software industry’s 6.01X. SNOW has a Value Score of F.

Price/Sales (F12M)

The consensus mark for SNOW’s fiscal 2026 earnings is pegged at $1.17 per share, which has increased 9.34% over the past 30 days. The figure indicates a 40.96% increase year over year. 

Snowflake Inc. Price and Consensus

Snowflake Inc. price-consensus-chart | Snowflake Inc. Quote

Snowflake currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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