Snowflake's powerful performance data and outlook shows that the “bull market narrative” for the AI application software sector will deepen.
According to the Zhitong Finance App, Snowflake (Snow.US), the leader in the cloud data warehouse sector, is expected to continue the strong performance growth trend driven by the AI boom in the second half of 2026.
Snowflake's share price exceeded 20% by the end of the US market on Thursday, closing Wednesday at $241 after releasing second-quarter performance data and future prospects. Amidst an unprecedented global push for AI, Snowflake stocks have risen by 55%, significantly outpacing the S&P 500 and NASDAQ 100 indexes.
From the perspective of the latest financial reporting data, the continued increase in spending by some government sectors on AI infrastructure and AI application software will drive explosive growth in demand for Snowflake's cloud data warehousing and data analytics services, mitigating market concerns about the slowdown in the economy and the potential impact of OpenAI.
Snowflake's product revenue for the second quarter was approximately $1.09 billion, with Wall Street's average forecast exceeding $1.04 billion, representing 32% year-on-year growth. The company's adjusted per share profits based on the second quarter, based on the non-GAAP standard, were $0.35, almost doubled for the same period last year, with Wall Street analysts estimated at $0.27. As of the end of July, Snowflake's net revenue retention rate was approximately 125%. This serves not only as increased purchases due to the stickiness of existing customers and products, but also as a strong evidence of robust AI-based revenue generation. Snowflake's high-value customers continue to grow, with 654 customers spending over $1 million in product over the last 12 months, up 30% year-on-year.
In terms of performance outlook, Snowflake expects product revenue to be between $1.125 billion and $113 billion in the third quarter, exceeding Wall Street's $1.12 billion forecast, meaning a growth rate of around 25% to 26% year-on-year. Snowflake expects its total revenue to reach $4.395 billion for fiscal year 2026, surpassing Wall Street's $4.344 billion forecast, suggesting potential growth of 27% year-on-year, a revise that was previously upwards from $4.333 billion.
What exactly is Snowflake?
Snowflake is a company focused on cloud-native data warehousing and AI data services (the theme provided on the official website is “AI Data Cloud”). Its core is a manageable, scalable cloud data warehouse/data platform that provides data storage, computation, governance, security and shared services, gradually integrating AI/LLM (large-scale model) capabilities into the company's software platform (cortical, Arctic, native apps, etc.).
From a market perception and product format perspective, Snowflake has long been considered a benchmark for cloud data warehousing. The company began with cloud data warehousing/SQL analytics, highlighting strong governance, data sharing and fully managed ease of use. However, in recent years it has been extended to the AI-Native data services platform via cortical/Arctic/Polaris/Native apps, increasing interoperability with Spark, Iceberg/Delta, and more engineering/scientific workloads.
Snowflake's “key positioning” in the field of artificial intelligence can be found in the “Data and Governance Layer + AI Operation Layer” and “AI Execution and Access Layer” within the AI Data Software Technology Stack. For example, Cortex (such as AISQL/analyst) is embedded in AI large-scale model invocations, RAG/search, unstructured analytics, evaluation, and cloud-native experiences for the platform. The native app framework allows third parties to directly distribute and monetize AI/ML applications as SnowFlake Cloud-Native applications. The company's AI data services platform aims to “make data easy on-site, bring AI closer to data, and ensure governance and compliance throughout the process.”
Wall Street and the industry see Databricks as Snowflake's top rival. Databricks' latest private valuation reaches around $100 billion, and revenue growth is extremely robust. In contrast, even after the stock price surged more than 20% on Thursday, Snowflake's market capitalization is around $80 billion, indicating that it still could be up compared to Databricks.
The bullish narrative of the AI application sector is strengthened! Wall Street has published a bullish research report on snowflakes.
Snowflake's powerful performance data and Outlook show that the “bulging narrative” of the AI application software sector is experiencing another important enhancement. Previously, leaders in AI applications focused on “AI+Digital Advertising” such as Applovin, and leaders focused on “AI+Data Analytics” such as Palantir, and Meta, the parent company of Facebook and Instagram, have been reporting extremely strong performance data and future prospects since the beginning of this year. This suggests that not only is there a strong demand for AI computing infrastructure, such as NVIDIA's AI GPUs, but also the demand for AI application software, especially enterprise-level AI applications that can significantly improve operational efficiency, can also robustly and rapidly penetrate a wide range of industries.
The global investment wave of technology inventory continues to significantly support the evaluation of AI application companies such as Applovin, Trade Desk, Duolingo and Palantir, as it covers both AI computing infrastructure and AI application software simultaneously. Future killer-generating AI applications covering the B-terminal or C-ends of various industries, as well as “AI agents,” which are likely to significantly increase human productivity, can experience explosive growth. This is why Global Capital has recently flowed into software stocks.
“In the second quarter, Snowflake's product revenues rose every quarter of $94 million, indicating the largest quarter growth in history. This strong upward trend is driven primarily by the company's core business (mainly as it moves to new cloud-native workloads) to investors.
They noted that the cloud data platform management company has increased its sales and marketing team by 22% so far in 2025, showing stronger ambitions for performance growth. Piper Sandler maintains Snowflake's “overweight” rating, significantly increasing its target price from $215 to $285.
Meanwhile, Wall Street financial giant Goldman Sachs has repeatedly rated its stocks “buy” ratings, increasing its target price from $230 to $260, highlighting the booming growth opportunities for AI applications.
“Snowflake highlights the opportunity to become a generative AI data services platform, enabling customers to quickly develop AI agent applications with the support of cortical AISQL,” an analyst at Goldman Sachs, led by Kash Rangan, said in the report.
Additionally, Apache Spark's Snowflake Connect is expected to unlock new, large-scale data science workloads and expand the addressable market (TAM) opportunities. It is noteworthy that the acceleration of product revenue comes not only from the waves of AI, but also from the traditional growth brought about by the core cloud data warehouse platform. The Goldman Sachs analyst team will support 25% of deployed use cases and drive momentum consistently with new customer acquisition (50% of new net customers in the second quarter were related to AI applications).
KeyBanc has repeatedly rated the company's “overweight” ratings, increasing its target price from $250 to $275.
“Snowflake is a powerful pace of data warehouse gravity, attracting the gravity of data warehouses, and continuing to benefit from continuing to expand from core data warehouse services and focusing on the integrated strategy of 'Data Services + AI',” reports analysts at Keyvance, led by Eric Heath.
Famous Wall Street investment company Wedbush is also impressed by the company's path to becoming a data service platform, noting that it remains on the AI 30 investment list, including the biggest beneficiaries of the “global AI revolution” that Wedbush has wagered. The company maintained its “outperform” rating for Snowflake, increasing its target price from $230 to $250.
“Wal Street consensus expectations are above 8.3% as Snowflake relies on the increasing focus on efficiently allocating investments in corporate innovation engines and core growth areas while driving profit growth. “Snowflake will rely on cloud data services platforms to remain at the forefront of AI innovation and deliver cutting-edge cloud data processing and warehousing services to clients across a variety of industries, striving to simplify platform architecture.”
