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SNOW Stock Trades Higher Than Industry at 10.8 P/S: Buy, Sell or Hold?
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Key Takeaways
SNOW trades at 10.80x forward sales, a premium to the industry and key rivals like Amazon and Oracle.
Snowflake posted 20% customer growth and 125% net revenue retention in Q3 FY26, driven by AI adoption.
SNOW guides for 27%-28% product revenue growth in Q4 and FY26 despite macro and cost pressures.
Snowflake (SNOW - Free Report) shares are overvalued, as suggested by a Value Score of F. In terms of the forward 12-month Price/Sales (P/S), SNOW is trading at 10.80X, a premium compared with the Zacks Internet – Software industry’s 3.90X.
SNOW is trading at a premium against its competitors like Amazon (AMZN - Free Report) and Oracle (ORCL - Free Report) . Amazon and Oracle shares are currently trading at P/S of 2.61X and 10.37X, respectively.
SNOW's Valuation
Image Source: Zacks Investment Research
Snowflake’s shares have also lost 8% over the trailing six-month period, underperforming the Zacks Computer and Technology sector’s appreciation of 7.8%. The underperformance can be attributed to challenging macroeconomic uncertainties and elevated infrastructure spending, particularly on GPUs to support AI-driven initiatives, which is adding to cost pressures.
However, the company’s shares have outperformed the Zacks Internet Software industry, which has underperformed 22.4% in the trailing six-month period. 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 third quarter of fiscal 2026.
SNOW Stock's Performance
Image Source: Zacks Investment Research
SNOW reported 20% year-over-year growth in the number of customers, reaching 12,621 in the fiscal third quarter of 2026. The company now has 688 customers with trailing 12-month product revenues exceeding $1 million (up 29% year over year) and 766 Forbes Global 2,000 customers.
SNOW Benefits From Expanding Portfolio
Snowflake benefits from its role in the enterprise AI revolution, with strong adoption of its AI capabilities, such as Snowflake Intelligence and Cortex AI, driving customer growth. 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.
Snowflake’s focus on AI has been a key catalyst, with AI influencing 50% of bookings signed during the fiscal third quarter. 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 expanding portfolio has been noteworthy. The company recently announced new enterprise AI capabilities, including Semantic View Autopilot, ML and notebook upgrades, agent evaluation tools, and expanded AI cost governance to deliver more trusted, scalable and efficient AI on Snowflake.
The company also announced that it has launched an AI-powered Business Intelligence Agent for United Rentals. This agent uses Snowflake Intelligence and Snowflake Cortex Code, allowing conversational access to controlled enterprise data. It also speeds up the development of more internal AI agents across more than 1,600 branches.
SNOW Benefits From Expanding Partnerships
Snowflake’s expanding partnership with Alphabet’s (GOOGL - Free Report) cloud computing platform Google Cloud has been noteworthy. In January 2026, Snowflake expanded its partnership with Alphabet’s Google Cloud to improve product integration and market strategy. This integration brings Alphabet’s Google Cloud Gemini 3 models directly into Snowflake Cortex AI.
Enterprises can build and scale generative AI applications securely and with governed data, without data movement. The partnership also includes global expansion, marketplace co-selling, and infrastructure upgrades that enhance price and performance on Alphabet’s Google Cloud.
SNOW Offers Positive Q4 and FY26 Guidance
Snowflake’s rich partner base and an innovative portfolio are expected to drive the company’s top-line growth.
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%. The Zacks Consensus Estimate for fourth-quarter fiscal 2026 revenues is currently pegged at $1.25 billion, indicating 26.85% year-over-year growth.
The consensus mark for earnings is currently pegged at 27 cents per share, unchanged over the past 30 days. This suggests a decrease of 10% year over year.
For fiscal 2026, Snowflake expects product revenues of $4.446 billion, indicating 28% year-over-year growth. The Zacks Consensus Estimate for fiscal 2026 revenues is currently pegged at $4.65 billion, indicating 28.20% year-over-year growth.
The consensus mark for earnings is currently pegged at $1.20 per share, unchanged over the past 30 days. This suggests an increase of 44.58% year over year.
Despite Snowflake’s expanding portfolio and partner base, the company is facing stiff competition from the likes of major players like Amazon and Oracle, which are also expanding their footprint in the AI space.
Oracle’s expanding portfolio has been noteworthy. The company recently launched role-based AI agents in Oracle Fusion Cloud CX. These agents automate marketing, sales, and service tasks. They provide predictive, data-driven help right within business operations through AI Agent Studio.
Amazon’s AI initiatives gained significant momentum during the fourth quarter of 2025, representing a strategic priority across the company. The company’s AI initiatives gained significant momentum during the quarter. AWS’s custom chips business, including Trainium and Graviton, now has a combined annual revenue run rate of more than $10 billion and is growing at triple-digit percentages year over year.
What Should Investors Do With SNOW Stock?
Despite SNOW’s robust portfolio, challenging macroeconomic uncertainties, rising AI costs and stiff competition from hyperscale cloud providers remain headwinds. Stretched valuation remains a concern.
View the Zacks #1 Rank List
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SNOW Stock Trades Higher Than Industry at 10.8 P/S: Buy, Sell or Hold?
Key Takeaways
Snowflake (SNOW - Free Report) shares are overvalued, as suggested by a Value Score of F. In terms of the forward 12-month Price/Sales (P/S), SNOW is trading at 10.80X, a premium compared with the Zacks Internet – Software industry’s 3.90X.
SNOW is trading at a premium against its competitors like Amazon (AMZN - Free Report) and Oracle (ORCL - Free Report) . Amazon and Oracle shares are currently trading at P/S of 2.61X and 10.37X, respectively.
SNOW's Valuation
Image Source: Zacks Investment Research
Snowflake’s shares have also lost 8% over the trailing six-month period, underperforming the Zacks Computer and Technology sector’s appreciation of 7.8%. The underperformance can be attributed to challenging macroeconomic uncertainties and elevated infrastructure spending, particularly on GPUs to support AI-driven initiatives, which is adding to cost pressures.
However, the company’s shares have outperformed the Zacks Internet Software industry, which has underperformed 22.4% in the trailing six-month period. 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 third quarter of fiscal 2026.
SNOW Stock's Performance
Image Source: Zacks Investment Research
SNOW reported 20% year-over-year growth in the number of customers, reaching 12,621 in the fiscal third quarter of 2026. The company now has 688 customers with trailing 12-month product revenues exceeding $1 million (up 29% year over year) and 766 Forbes Global 2,000 customers.
SNOW Benefits From Expanding Portfolio
Snowflake benefits from its role in the enterprise AI revolution, with strong adoption of its AI capabilities, such as Snowflake Intelligence and Cortex AI, driving customer growth. 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.
Snowflake’s focus on AI has been a key catalyst, with AI influencing 50% of bookings signed during the fiscal third quarter. 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 expanding portfolio has been noteworthy. The company recently announced new enterprise AI capabilities, including Semantic View Autopilot, ML and notebook upgrades, agent evaluation tools, and expanded AI cost governance to deliver more trusted, scalable and efficient AI on Snowflake.
The company also announced that it has launched an AI-powered Business Intelligence Agent for United Rentals. This agent uses Snowflake Intelligence and Snowflake Cortex Code, allowing conversational access to controlled enterprise data. It also speeds up the development of more internal AI agents across more than 1,600 branches.
SNOW Benefits From Expanding Partnerships
Snowflake’s expanding partnership with Alphabet’s (GOOGL - Free Report) cloud computing platform Google Cloud has been noteworthy. In January 2026, Snowflake expanded its partnership with Alphabet’s Google Cloud to improve product integration and market strategy. This integration brings Alphabet’s Google Cloud Gemini 3 models directly into Snowflake Cortex AI.
Enterprises can build and scale generative AI applications securely and with governed data, without data movement. The partnership also includes global expansion, marketplace co-selling, and infrastructure upgrades that enhance price and performance on Alphabet’s Google Cloud.
SNOW Offers Positive Q4 and FY26 Guidance
Snowflake’s rich partner base and an innovative portfolio are expected to drive the company’s top-line growth.
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%. The Zacks Consensus Estimate for fourth-quarter fiscal 2026 revenues is currently pegged at $1.25 billion, indicating 26.85% year-over-year growth.
The consensus mark for earnings is currently pegged at 27 cents per share, unchanged over the past 30 days. This suggests a decrease of 10% year over year.
For fiscal 2026, Snowflake expects product revenues of $4.446 billion, indicating 28% year-over-year growth. The Zacks Consensus Estimate for fiscal 2026 revenues is currently pegged at $4.65 billion, indicating 28.20% year-over-year growth.
The consensus mark for earnings is currently pegged at $1.20 per share, unchanged over the past 30 days. This suggests an increase of 44.58% year over year.
Snowflake Inc. Price and Consensus
Snowflake Inc. price-consensus-chart | Snowflake Inc. Quote
SNOW Suffers From Stiff Competition
Despite Snowflake’s expanding portfolio and partner base, the company is facing stiff competition from the likes of major players like Amazon and Oracle, which are also expanding their footprint in the AI space.
Oracle’s expanding portfolio has been noteworthy. The company recently launched role-based AI agents in Oracle Fusion Cloud CX. These agents automate marketing, sales, and service tasks. They provide predictive, data-driven help right within business operations through AI Agent Studio.
Amazon’s AI initiatives gained significant momentum during the fourth quarter of 2025, representing a strategic priority across the company. The company’s AI initiatives gained significant momentum during the quarter. AWS’s custom chips business, including Trainium and Graviton, now has a combined annual revenue run rate of more than $10 billion and is growing at triple-digit percentages year over year.
What Should Investors Do With SNOW Stock?
Despite SNOW’s robust portfolio, challenging macroeconomic uncertainties, rising AI costs and stiff competition from hyperscale cloud providers remain headwinds. Stretched valuation 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.