Snowflake Deepens AI Integration: Is the Growth Thesis Strengthening?

Globe and Mail

6 days ago

Snowflake SNOW is deepening its AI integration across platform layers, driving strong adoption and strengthening its competitive position in enterprise infrastructure. Latest innovations like Snowflake Intelligence and Data Science Agent, SnowConvert AI and Cortex AISQL, as well as Cortex Knowledge Extensions, are expected to help SNOW expand clientele. Currently, more than 5,200 accounts use Snowflake's AI and machine learning solutions on a weekly basis.
The launch of Cortex Gen2 expands Snowflake's platform capabilities with improved analytics performance and adaptive compute to support scalable AI workloads. Openflow introduces a managed ingestion layer for structured, unstructured and streaming data-enhancing interoperability and data movement across the AI Data Cloud. These innovations are designed to accelerate developer adoption and broaden AI applications.
Snowflake is leveraging these platform upgrades to drive adoption across enterprise functions. The company's partnership with Acxiom enables Real ID-based customer activation inside Snowflake's clean rooms, supporting AI-driven campaigns without data movement. Design giant Canva has adopted Snowflake's AI stack to personalize user experiences, streamline lead routing and scale global product velocity. These wins reflect the expanding relevance of SNOW's AI infrastructure across marketing, design and B2B operations.
SNOW Faces Stiff Competition
Snowflake faces rising competition from Palantir Technologies PLTR and Datadog DDOG, both of which are strengthening their AI infrastructure and enterprise data capabilities.
Palantir is advancing its position through its Artificial Intelligence Platform (AIP), which enables secure deployment of large language models across regulated environments. AIP integrates governance, explainability and operational control, helping enterprises adopt AI at scale. Palantir's commercial momentum and deep presence in mission-critical sectors position it as a full-stack competitor in AI-native infrastructure.
Datadog is reinforcing its developer-first model with expanded observability capabilities, including AI-driven telemetry pipelines, diagnostics and real-time alerting. Its platform supports cloud-native enterprises managing dynamic workloads and increasingly overlaps with Snowflake's AI Data Cloud stack. Datadog's continued investments in GenAI integrations and predictive analytics enhance its competitive position in enterprise-scale data environments.
SNOW's Share Price Performance, Valuation and Estimates
Snowflake shares have appreciated 37.2% year to date, outperforming the broader Zacks Computer & Technology sector's return of 0.5% and the Zacks Internet Software industry's increase of 11.3%.
SNOW's YTD Price Performance
Image Source: Zacks Investment Research
Snowflake stock is trading at a premium, with a forward 12-month Price/Sales of 14.43X compared with the industry's 5.62X. SNOW has a Value score of F.
SNOW's Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for second-quarter fiscal 2026 earnings is pegged at 26 cents per share, down by a penny over the past 30 days, indicating 44.44% year-over-year growth
The consensus mark for SNOW's fiscal 2026 earnings is pegged at $1.06 per share, which has declined by 6 cents over the past 30 days. The figure indicates a 27.71% increase year over year.
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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