Snowflake Rides on Strong AI Demand: A Sign for More Upside?

Snowflake SNOW is benefiting from the growing demand for AI-driven solutions. Its focus on AI has been a key catalyst, with AI influencing 50% of bookings signed during the fiscal third quarter 2026. The company achieved a $100 million AI revenue run rate one quarter earlier than expected, reflecting strong enterprise adoption of its AI capabilities.

SNOW’s addition of Snowflake Intelligence, its agentic AI platform, has been noteworthy. In the fiscal third quarter of 2026,  this product has seen rapid adoption, with 1,200 customers leveraging its capabilities to transform how businesses interact with their data. 

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 third quarter of fiscal 2026, the company announced that more than 7,300 customers are using Snowflake’s AI and ML technology weekly.

Building on this momentum, Snowflake recently announced a multi-year $200M expansion of its partnership with Anthropic to bring Claude models natively to the Snowflake platform, launch a joint global GTM for enterprise AI agents, and power Snowflake Intelligence with secure, governed, multi-step reasoning across regulated industries.

The company is well-positioned to capitalize on the growing demand for enterprise AI and data cloud solutions. For the fourth quarter of fiscal 2026, Snowflake expects product revenues in the range of $1.195-$1.2 billion. The projection range indicates year-over-year growth of 27%.

Snowflake Suffers From Stiff Competition

Snowflake is facing stiff competition from the likes of major players like Amazon AMZN and Oracle ORCL, which are also expanding their footprint in the AI space.

Amazon’s AI initiatives gained significant momentum during the third quarter of 2025, representing a strategic priority across the company. In the third quarter of 2025, Amazon launched Project Rainier, a massive AI compute cluster containing nearly 500,000 Trainium2 chips specifically designed to build and deploy Anthropic’s Claude AI models. Trainium2, Amazon’s custom AI chip, saw continued strong adoption and grew 150% quarter over quarter, becoming a multi-billion-dollar business that is now fully subscribed. 

Oracle’s expanding portfolio has been noteworthy. In October 2025, Oracle announced the Oracle Fusion Applications AI Agent Marketplace. This new embedded marketplace allows Fusion Cloud customers to easily find, use, and customize approved, partner-built AI agents. These agents help speed up secure, large-scale AI adoption in finance, HR, supply chain, and customer experience.

SNOW’s Share Price Performance, Valuation, and Estimates

Snowflake shares have appreciated 1.6% in the trailing six-month period, underperforming the broader Zacks Computer & Technology sector’s return of 21.3%. However, it has outperformed the Zacks Internet Software industry’s decline of 5.1%.

SNOW Stock Performance

Snowflake stock is trading at a premium, with a forward 12-month Price/Sales ratio of 13.85X, compared to the Internet Software industry’s 4.86X. SNOW has a Value score of F.

SNOW Valuation

The consensus mark for SNOW’s fiscal 2026 earnings is pegged at $1.20 per share, which has increased 2.56% over the past 30 days. The figure indicates a 44.58% year-over-year increase. 

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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