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Snowflake vs. Broadcom: Which Enterprise AI Stock Is the Smarter Buy?
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Key Takeaways
Snowflake leads Broadcom with 47.1% YTD gains and strong AI-driven growth.
SNOW raised its fiscal 2027 product revenue outlook to $6.07 billion.
Broadcom's AI growth faces margin pressure, customer concentration and debt risks.
Snowflake (SNOW - Free Report) and Broadcom (AVGO - Free Report) are major players in the enterprise AI boom. Snowflake provides AI-powered cloud data platforms and analytics, while Broadcom supplies the AI networking, custom silicon and infrastructure technologies that enable large-scale AI deployments across enterprises and hyperscale data centers.
Snowflake or Broadcom — Which of these Enterprise AI stocks has the greater upside potential? Let’s find out.
The Case for SNOW Stock
Snowflake is benefiting from a strong enterprise AI push as organizations increasingly use its AI Data Cloud to modernize data estates, deploy agents and automate business workflows. This momentum helped product revenues rise 37% year over year to $1.49 billion in the second quarter of fiscal 2027, accounting for 96% of total revenues and marking another quarter of accelerating growth.
Enterprise expansion remains another key catalyst. In the second quarter of fiscal 2027, SNOW had 14,554 total customers after adding 692 net new customers, representing a 32% year-over-year increase in net additions. The company added 14 Forbes Global 2000 customers, taking that total to 829. 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.
The adoption of Snowflake’s AI offerings remains noteworthy. In the second quarter of fiscal 2027, CoCo surpassed 9,100 accounts after adding more than 2,000 during the quarter, while CoWork expanded to 5,800 accounts, up nearly 11% sequentially. Customers, including 1Password and Indeed, are deploying these solutions to accelerate data and AI initiatives.
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.
The Case for AVGO Stock
Broadcom is benefiting from growing enterprise AI demand, which is creating opportunities across its semiconductor and infrastructure software businesses. Broadcom’s expanding portfolio of custom AI accelerators, networking solutions and VMware offerings strengthens its competitive position and supports its long-term growth prospects.
Broadcom’s AI semiconductor revenues surged 221% year over year to $16.7 billion in the third quarter of fiscal 2026, driven by strong demand for custom XPUs and AI networking solutions. The company’s six XPU customers are accelerating deployments, while partnerships with Google, Anthropic, OpenAI and Meta Platforms provide significant growth opportunities. AI networking revenues more than doubled, supported by increasing demand for high-performance connectivity.
This momentum provides strong visibility into Broadcom’s AI growth trajectory. The company expects fourth-quarter fiscal 2026 AI revenues of $21.7 billion, up 236% year over year, taking fiscal 2026 AI revenues to roughly $58 billion. Broadcom has secured supply to support AI semiconductor revenues of approximately $115 billion in fiscal 2027 and sees a path to roughly $230 billion in fiscal 2028, reflecting continued expansion in AI compute deployments.
Price Performance and Valuation of SNOW and AVGO
In the year-to-date period, SNOW shares have gained 47.1%, outperforming Broadcom shares, which have lost 2.4%. The outperformance of SNOW can be attributed to 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.
Despite Broadcom’s expanding portfolio, high customer concentration, intense competition, declining gross margin as the XPU mix increases, and execution risk tied to large AI infrastructure commitments remain headwinds. The company also remains exposed to a sizable debt burden and integration complexity.
SNOW vs AVGO Performance
Image Source: Zacks Investment Research
Both SNOW and Broadcom shares are currently overvalued, as suggested by a Value Score of F.
In terms of forward 12-month Price/Sales, SNOW shares are trading at 15.06X, higher than Broadcom’s 9.33X.
SNOW vs AVGO Valuation
Image Source: Zacks Investment Research
How Do Earnings Estimates Compare for SNOW & AVGO?
The Zacks Consensus Estimate for SNOW’s fiscal 2027 earnings is pegged at $2.23 per share, increased by 1.82% over the past 30 days. This indicates a 78.40% increase year over year.
The Zacks Consensus Estimate for Broadcom’s fiscal 2026 earnings is pegged at $11.79 per share, unchanged over the past 30 days. This indicates a 72.87% increase year over year.
SNOW’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 22.77%. Broadcom’s earnings beat the consensus mark in each of the trailing four quarters, delivering an average surprise of 2.51%. The average surprise of SNOW is higher than that of Broadcom.
Conclusion
While both Snowflake and Broadcom are well-positioned to benefit from the enterprise AI boom, SNOW appears to be the better pick, supported by stronger share price performance, accelerating product revenue growth and higher earnings surprises.
Despite strong AI semiconductor revenue growth and expanding hyperscaler partnerships, Broadcom faces challenges from customer concentration, margin pressure, a sizable debt burden and execution risks tied to large AI infrastructure commitments.
View the Zacks #1 Rank List
Image: Bigstock
Snowflake vs. Broadcom: Which Enterprise AI Stock Is the Smarter Buy?
Key Takeaways
Snowflake (SNOW - Free Report) and Broadcom (AVGO - Free Report) are major players in the enterprise AI boom. Snowflake provides AI-powered cloud data platforms and analytics, while Broadcom supplies the AI networking, custom silicon and infrastructure technologies that enable large-scale AI deployments across enterprises and hyperscale data centers.
Snowflake or Broadcom — Which of these Enterprise AI stocks has the greater upside potential? Let’s find out.
The Case for SNOW Stock
Snowflake is benefiting from a strong enterprise AI push as organizations increasingly use its AI Data Cloud to modernize data estates, deploy agents and automate business workflows. This momentum helped product revenues rise 37% year over year to $1.49 billion in the second quarter of fiscal 2027, accounting for 96% of total revenues and marking another quarter of accelerating growth.
Enterprise expansion remains another key catalyst. In the second quarter of fiscal 2027, SNOW had 14,554 total customers after adding 692 net new customers, representing a 32% year-over-year increase in net additions. The company added 14 Forbes Global 2000 customers, taking that total to 829. 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.
The adoption of Snowflake’s AI offerings remains noteworthy. In the second quarter of fiscal 2027, CoCo surpassed 9,100 accounts after adding more than 2,000 during the quarter, while CoWork expanded to 5,800 accounts, up nearly 11% sequentially. Customers, including 1Password and Indeed, are deploying these solutions to accelerate data and AI initiatives.
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.
The Case for AVGO Stock
Broadcom is benefiting from growing enterprise AI demand, which is creating opportunities across its semiconductor and infrastructure software businesses. Broadcom’s expanding portfolio of custom AI accelerators, networking solutions and VMware offerings strengthens its competitive position and supports its long-term growth prospects.
Broadcom’s AI semiconductor revenues surged 221% year over year to $16.7 billion in the third quarter of fiscal 2026, driven by strong demand for custom XPUs and AI networking solutions. The company’s six XPU customers are accelerating deployments, while partnerships with Google, Anthropic, OpenAI and Meta Platforms provide significant growth opportunities. AI networking revenues more than doubled, supported by increasing demand for high-performance connectivity.
This momentum provides strong visibility into Broadcom’s AI growth trajectory. The company expects fourth-quarter fiscal 2026 AI revenues of $21.7 billion, up 236% year over year, taking fiscal 2026 AI revenues to roughly $58 billion. Broadcom has secured supply to support AI semiconductor revenues of approximately $115 billion in fiscal 2027 and sees a path to roughly $230 billion in fiscal 2028, reflecting continued expansion in AI compute deployments.
Price Performance and Valuation of SNOW and AVGO
In the year-to-date period, SNOW shares have gained 47.1%, outperforming Broadcom shares, which have lost 2.4%. The outperformance of SNOW can be attributed to 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.
Despite Broadcom’s expanding portfolio, high customer concentration, intense competition, declining gross margin as the XPU mix increases, and execution risk tied to large AI infrastructure commitments remain headwinds. The company also remains exposed to a sizable debt burden and integration complexity.
SNOW vs AVGO Performance
Image Source: Zacks Investment Research
Both SNOW and Broadcom shares are currently overvalued, as suggested by a Value Score of F.
In terms of forward 12-month Price/Sales, SNOW shares are trading at 15.06X, higher than Broadcom’s 9.33X.
SNOW vs AVGO Valuation
Image Source: Zacks Investment Research
How Do Earnings Estimates Compare for SNOW & AVGO?
The Zacks Consensus Estimate for SNOW’s fiscal 2027 earnings is pegged at $2.23 per share, increased by 1.82% over the past 30 days. This indicates a 78.40% increase year over year.
Snowflake Inc. Price and Consensus
Snowflake Inc. price-consensus-chart | Snowflake Inc. Quote
The Zacks Consensus Estimate for Broadcom’s fiscal 2026 earnings is pegged at $11.79 per share, unchanged over the past 30 days. This indicates a 72.87% increase year over year.
Broadcom Inc. Price and Consensus
Broadcom Inc. price-consensus-chart | Broadcom Inc. Quote
SNOW’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 22.77%. Broadcom’s earnings beat the consensus mark in each of the trailing four quarters, delivering an average surprise of 2.51%. The average surprise of SNOW is higher than that of Broadcom.
Conclusion
While both Snowflake and Broadcom are well-positioned to benefit from the enterprise AI boom, SNOW appears to be the better pick, supported by stronger share price performance, accelerating product revenue growth and higher earnings surprises.
Despite strong AI semiconductor revenue growth and expanding hyperscaler partnerships, Broadcom faces challenges from customer concentration, margin pressure, a sizable debt burden and execution risks tied to large AI infrastructure commitments.
Currently, Snowflake has a Zacks Rank #2 (Buy), making the stock a stronger pick than Broadcom, which has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.