Snowflake (SNOW) has rallied more than 61% year-to-date, far outpacing the S&P 500’s (SPX) 16% gain, yet I believe the stock still has room to run. With continued product momentum, growing enterprise adoption, accelerating AI workload activity, and a consistent track record of outperforming Street expectations, I remain bullish heading into the company’s upcoming earnings report scheduled for Wednesday next week.
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Upcoming Q3 Earnings Preview
Snowflake (SNOW) is due to publish its Q3 2026 earnings on December 3. Consensus estimates call for EPS of $0.31 and revenues of $1.18 billion. Over the past 12 months, analysts have raised their EPS forecasts by 14% and their revenue estimates by nearly 3%, reflecting increased confidence in Snowflake’s execution and sustained demand environment.
Historically, Snowflake has been a reliable performer, beating EPS and revenue expectations in eighteen of its last twenty quarters. Given recent platform activity and strong indicators of customer consumption strength, I expect another beat this time around.
While year-over-year comparisons are tough—Snowflake posted almost 32% revenue growth in Q2—I believe total revenue growth could still approach 30%, which would exceed consensus expectations of roughly 25.6%. I see this potential upside as driven by strong traction in new AI-related workloads, healthy product attach rates, and continued wins across large enterprise customers.
Management has placed considerable emphasis on Snowpark adoption and the success of Cortex, both of which drive deeper customer engagement and expand the volume of AI and machine learning workloads processed on Snowflake. This, combined with faster enterprise sales cycles and an increasing number of high-value deals, supports my view that net revenue retention can remain near 125%.
Strong Customer Momentum and Expanding Large-Deal Activity
Across regions and verticals, Snowflake continues to demonstrate robust commercial momentum. The company is increasingly winning larger, more strategic contracts with global enterprises as organizations prioritize modernizing their data architectures and preparing for GenAI integration. Not only is the firm attracting more customers, but it’s also attracting a higher-tier clientele in the process.
In Q2, Snowflake added a record 50 new $1 million-plus product revenue customers, bringing the total to 654. I expect another solid quarter of large-deal wins and steady new customer additions in the high-teens percentage range.
Management has emphasized stronger C-level engagement and deeper collaboration with global system integrators, which is improving Snowflake’s positioning in major digital-transformation initiatives. This broader strategic role within enterprise IT stacks increases Snowflake’s longevity and makes it harder for customers to switch vendors.
Snowflake Holds Its Ground Amid Intense Competition
The competitive landscape—with Databricks as the most formidable rival—remains an important topic for investors. While Databricks often leads in AI and ML workloads, Snowflake maintains a durable advantage in data warehousing, enterprise governance, and unified data cloud capabilities. Each company is attempting to encroach on the other’s territory, and recent customer checks indicate that wins are occurring on both sides.
However, Snowflake appears to be gaining ground in AI-driven workloads faster than many expected. More than half of Snowflake’s recent new logo additions are already using the platform for AI use cases, according to recent commentary. Roughly 25% of Snowflake’s enterprise customers now use AI capabilities every week. This signals increasing stickiness and continued momentum in areas where Databricks has historically been viewed as stronger.
AI, Data Unification, and Platform Innovation Remain Core Growth Catalysts
Snowflake continues to refine its go-to-market strategy by aligning engineering, innovation, and marketing to expand its reach, especially in the AI-native application space. The company is in the early stages of capitalizing on AI demand at scale, but several indicators point to durable momentum.
Customers are using Snowflake’s platform to consolidate data stored across disparate systems, unify analytical and transactional workloads, and deploy AI models closer to where enterprise data actually resides. As data becomes increasingly critical to AI outcomes, Snowflake’s ability to centralize and secure large datasets strengthens its long-term positioning.
Meanwhile, Snowflake Cortex is improving retrieval quality and offering customers simpler ways to build AI applications without needing deep machine learning expertise. Platform innovation remains one of Snowflake’s biggest competitive strengths, and I expect AI-related consumption to gradually become a larger contributor to product revenue.
Growth Supports Expansive Evaluation
Snowflake’s valuation remains stretched relative to the broader software sector. Its forward sales and earnings multiples are significantly above industry averages. The firm’s P/E ratio stands at 229.65 versus a sector median of 23.24, and Price-to-Sales stands at 20.24 versus a sector median of 3.36.
Using various valuation tools—including EV/EBIT multiples, P/E comparables, and a 10-year DCF EBITDA exit—I derive a fair value estimate of roughly $215 per share, implying more than 13% downside from current levels. That said, high-growth companies with rapidly expanding AI adoption often trade at valuations that appear aggressive through traditional lenses.
I believe Snowflake’s premium valuation is supported by materially higher expected growth rates compared to the sector. Revenue is projected to grow roughly 27% over the next twelve months, well above the industry median of 8%, while EBITDA growth is forecast at nearly 32%, versus a sector median of 12%.
Is SNOW a Buy, Sell, or Hold?
According to TipRanks, Snowflake holds a Strong Buy consensus rating from 34 analysts, including 31 Buys and 3 Holds. The average 12-month price target is $276.68, suggesting more than 10% upside from current levels over the coming 12 months.
Snowflake Poised for Another Earnings Beat Amid AI Tailwinds
Thanks to strong product attach rates, accelerating AI workload adoption, growing large-deal momentum, and a long track record of topping expectations, Snowflake appears well-positioned to deliver another revenue and EPS beat this quarter. While the stock still commands a premium valuation, its growth trajectory and central role in the AI–data convergence trend continue to justify a bullish outlook.
Heading into earnings, I remain constructive on the name and view Snowflake as one of the most compelling long-term platforms in the data-cloud and AI ecosystem.