Snowflake Inc. (SNOW): A Bull Case Theory

We came across a bullish thesis on Snowflake Inc. on Compounding Your Wealth’s Substack by Sergey. In this article, we will summarize the bulls’ thesis on SNOW. Snowflake Inc.'s share was trading at $168.43 as of February 6th. SNOW’s forward P/E was 103.09 according to Yahoo Finance.

Snowflake Inc. provides a cloud-based data platform for various organizations in the United States and internationally. SNOW delivered a strong third quarter of fiscal 2025, reinforcing its position as a core data and AI infrastructure platform for large enterprises and supporting a bullish outlook. The company reported revenue of $1.21 billion, up nearly 29% year over year, with product revenue growing at the same pace to $1.16 billion and exceeding expectations.

Profitability continued to inflect positively, with non-GAAP operating margin expanding more than 450 basis points year over year to 10.8% and free cash flow margin approaching double digits, reflecting improved cost discipline across sales, R&D, and G&A despite ongoing investments in growth. Remaining performance obligations rose 38% year over year to $7.88 billion, signaling strong multi-year demand visibility, while net revenue retention remained a healthy 125%, underscoring durable customer expansion even as it moderated modestly.

The key strategic driver remains Snowflake’s accelerating AI momentum. Cortex AI reached a $100 million revenue run rate a quarter ahead of plan, and AI influenced roughly half of all bookings during the quarter, indicating that usage has moved from experimentation to production. Snowflake Intelligence emerged as the fastest-adopted product in company history, broadening data access across enterprises and driving deeper platform engagement. At the same time, initiatives like Apache Iceberg support, Snowpark, and Dynamic Tables are expanding Snowflake’s addressable workloads while reducing friction for hybrid and open-data environments.

Management raised full-year revenue guidance to $4.45 billion, implying sustained high-20s growth, and highlighted improving customer behavior and record large-deal activity. While migration timing and consumption variability remain inherent risks, Snowflake’s expanding AI-led value proposition, improving margins, and strong demand indicators point to a favorable risk-reward profile and a structurally bullish long-term setup.

Previously, we covered a bullish thesis on Snowflake Inc. (SNOW) by Oliver | MMMT Wealth in April 2025, which highlighted the company’s 20%+ growth outlook, 126% net revenue retention, margin expansion despite elevated R&D, and strong balance sheet with $5 billion in cash. SNOW’s stock price has appreciated by approximately 20.10% since our coverage. Sergey shares a similar view but emphasizes on AI-driven momentum and raised full-year guidance following strong Q3 results.

Snowflake Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 102 hedge fund portfolios held SNOW at the end of the third quarter which was 100 in the previous quarter. While we acknowledge the risk and potential of SNOW as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SNOW and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.