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The company’s shares have also outperformed its peers, including major players like Oracle (ORCL - Free Report) , Broadcom (AVGO - Free Report) , and Amazon (AMZN - Free Report) , which are also expanding their footprint in the AI space. While Oracle shares have plunged 49.9%, Broadcom and Amazon shares have gained 8.7% and 13.8%, respectively, in the past year.
The outperformance can be attributed to SNOW’s strong AI adoption and increasing usage of its platform, as reflected by the net revenue retention rate of 126% in the second quarter of fiscal 2027.
SNOW Stock Performance
Image Source: Zacks Investment Research
SNOW Rides on AI Adoption and Product Revenue Growth
Snowflake is benefiting from accelerating product revenue growth and rising AI adoption. The company’s fiscal second-quarter performance was driven by consumption across its core platform, with product revenues representing the majority of results. Product revenues rose 37% to $1.49 billion and accounted for 96% of total revenues in the fiscal second quarter.
Snowflake’s expanding AI portfolio has been noteworthy. The company has rapidly broadened its suite of AI-powered products, including CoCo and CoWork, which are seeing strong adoption across a diverse customer base. The company launched more than 330 generally available product capabilities during the first half, including Cortex Sense and Cortex AI Gateway, strengthening its ability to offer governed AI, model choice and agentic workflows.
SNOW’s accelerating product revenue reflects strength across both its core platform and newer AI offerings. Management noted that AI products contributed roughly half of the recent acceleration, while faster migrations and expanding workloads also supported growth. CoCo surpassed 9,100 accounts after adding more than 2,000 during the second quarter of fiscal 2027, while CoWork expanded to 5,800 accounts, up nearly 11% sequentially. Snowflake is also seeing AI adoption drive greater consumption of its core platform, creating a flywheel in which customers adopting AI services increasingly use Snowflake’s broader data capabilities.
Strong AI demand is improving Snowflake’s financial outlook. For fiscal 2027, the company raised product revenue guidance to $6.07 billion, implying 36% year-over-year growth compared with its previous outlook of $5.84 billion and 31% growth. Fiscal third-quarter product revenues are expected to be between $1.588 billion and $1.593 billion, indicating 37-38% growth.
SNOW Benefits From Expanding Customer Base
Snowflake is benefiting from an expanding customer base, strong adoption among large enterprises and rising consumption across its AI Data Cloud. In the second quarter of fiscal 2027, SNOW had 14,554 total customers, up 32% year over year, after adding 692 net new customers. The company also added 14 Forbes Global 2000 customers, taking the total to 829, or more than 41% of the Global 2000.
Snowflake is also witnessing deeper engagement from existing customers. Large-customer momentum remained strong, with 828 customers generating more than $1 million in trailing 12-month product revenues, up 27% year over year. Another 65 customers exceeded $10 million in trailing product revenues.
Sustained customer additions, deeper enterprise penetration and increasing AI adoption are expected to support Snowflake’s growth prospects. In the second quarter of 2026, remaining performance obligations increased 30% year over year to $9 billion, with roughly 54% expected to be recognized as revenue over the next 12 months.
SNOW Offers Positive Guidance
Snowflake’s rich customer base and innovative AI portfolio are expected to drive the company’s top-line growth.
The Zacks Consensus Estimate for fiscal third-quarter revenues is currently pegged at $1.65 billion, indicating 36.11% year-over-year growth.
The consensus mark for earnings is currently pegged at 60 cents per share, which has been unchanged over the past 30 days. This suggests an increase of 71.43% year over year.
Snowflake shares are currently overvalued, as suggested by its Value Score of F.
SNOW stock is trading at a premium with a forward 12-month Price/Sales of 15.83X compared with the Internet Software industry’s 4.44X, Oracle’s 4.18X, Broadcom’s 10.56X and Amazon’s 3X.
SNOW Valuation
Image Source: Zacks Investment Research
Conclusion
Snowflake’s accelerating AI adoption, strong enterprise momentum and raised product revenue guidance support a positive outlook for the stock. These factors have justified its premium valuation.
View the Zacks #1 Rank List
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Snowflake Stock Rallies 34% in a Year: Should You Buy, Sell, or Hold?
Key Takeaways
Snowflake’s (SNOW - Free Report) shares have soared 34.2% over the trailing 12-month period, outperforming the Zacks Computer and Technology sector’s 27.1% gain and the Zacks Internet Software industry’s 3.2% decline.
The company’s shares have also outperformed its peers, including major players like Oracle (ORCL - Free Report) , Broadcom (AVGO - Free Report) , and Amazon (AMZN - Free Report) , which are also expanding their footprint in the AI space. While Oracle shares have plunged 49.9%, Broadcom and Amazon shares have gained 8.7% and 13.8%, respectively, in the past year.
The outperformance can be attributed to SNOW’s strong AI adoption and increasing usage of its platform, as reflected by the net revenue retention rate of 126% in the second quarter of fiscal 2027.
SNOW Stock Performance
Image Source: Zacks Investment Research
SNOW Rides on AI Adoption and Product Revenue Growth
Snowflake is benefiting from accelerating product revenue growth and rising AI adoption. The company’s fiscal second-quarter performance was driven by consumption across its core platform, with product revenues representing the majority of results. Product revenues rose 37% to $1.49 billion and accounted for 96% of total revenues in the fiscal second quarter.
Snowflake’s expanding AI portfolio has been noteworthy. The company has rapidly broadened its suite of AI-powered products, including CoCo and CoWork, which are seeing strong adoption across a diverse customer base. The company launched more than 330 generally available product capabilities during the first half, including Cortex Sense and Cortex AI Gateway, strengthening its ability to offer governed AI, model choice and agentic workflows.
SNOW’s accelerating product revenue reflects strength across both its core platform and newer AI offerings. Management noted that AI products contributed roughly half of the recent acceleration, while faster migrations and expanding workloads also supported growth. CoCo surpassed 9,100 accounts after adding more than 2,000 during the second quarter of fiscal 2027, while CoWork expanded to 5,800 accounts, up nearly 11% sequentially. Snowflake is also seeing AI adoption drive greater consumption of its core platform, creating a flywheel in which customers adopting AI services increasingly use Snowflake’s broader data capabilities.
Strong AI demand is improving Snowflake’s financial outlook. For fiscal 2027, the company raised product revenue guidance to $6.07 billion, implying 36% year-over-year growth compared with its previous outlook of $5.84 billion and 31% growth. Fiscal third-quarter product revenues are expected to be between $1.588 billion and $1.593 billion, indicating 37-38% growth.
SNOW Benefits From Expanding Customer Base
Snowflake is benefiting from an expanding customer base, strong adoption among large enterprises and rising consumption across its AI Data Cloud. In the second quarter of fiscal 2027, SNOW had 14,554 total customers, up 32% year over year, after adding 692 net new customers. The company also added 14 Forbes Global 2000 customers, taking the total to 829, or more than 41% of the Global 2000.
Snowflake is also witnessing deeper engagement from existing customers. Large-customer momentum remained strong, with 828 customers generating more than $1 million in trailing 12-month product revenues, up 27% year over year. Another 65 customers exceeded $10 million in trailing product revenues.
Sustained customer additions, deeper enterprise penetration and increasing AI adoption are expected to support Snowflake’s growth prospects. In the second quarter of 2026, remaining performance obligations increased 30% year over year to $9 billion, with roughly 54% expected to be recognized as revenue over the next 12 months.
SNOW Offers Positive Guidance
Snowflake’s rich customer base and innovative AI portfolio are expected to drive the company’s top-line growth.
The Zacks Consensus Estimate for fiscal third-quarter revenues is currently pegged at $1.65 billion, indicating 36.11% year-over-year growth.
The consensus mark for earnings is currently pegged at 60 cents per share, which has been unchanged over the past 30 days. This suggests an increase of 71.43% year over year.
Snowflake Inc. Price and Consensus
Snowflake Inc. price-consensus-chart | Snowflake Inc. Quote
SNOW Trades at a Premium
Snowflake shares are currently overvalued, as suggested by its Value Score of F.
SNOW stock is trading at a premium with a forward 12-month Price/Sales of 15.83X compared with the Internet Software industry’s 4.44X, Oracle’s 4.18X, Broadcom’s 10.56X and Amazon’s 3X.
SNOW Valuation
Image Source: Zacks Investment Research
Conclusion
Snowflake’s accelerating AI adoption, strong enterprise momentum and raised product revenue guidance support a positive outlook for the stock. These factors have justified its premium valuation.
SNOW stock currently carries a Zacks Rank #2 (Buy), which implies that investors should start accumulating the stock right now. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.