Can AI Workload Expansion Strengthen Snowflake's Next Leg of Growth?

Snowflake’s SNOW AI product suite is emerging as a key driver of workload expansion across its platform. As enterprises scale AI use cases, more data is being processed, queried and operationalized within Snowflake. This is directly increasing platform consumption and strengthening its role in enterprise data architectures.

A key catalyst is the rapid adoption of Snowflake Intelligence and Cortex Code. These tools are not just additive features. They are expanding how customers use the platform. Snowflake Intelligence enables business users to interact with data through AI-driven agents, increasing query volumes. Cortex Code accelerates development cycles, allowing teams to build and deploy data pipelines and AI applications faster. This leads to more frequent workload execution. Product revenue grew 30% year over year to $1.23 billion in the fourth quarter of fiscal 2026, reflecting steady demand and rising AI-driven usage. AI-enabled accounts exceeded 9,100 in the quarter. Snowflake Intelligence scaled to more than 2,500 accounts within three months of its broader rollout, while Cortex Code has been adopted by over 4,400 customers.

Momentum is also being driven by broader workload integration. Cortex Code CLI supports tools like dbt and Apache Airflow, allowing customers to extend existing data pipelines into Snowflake. This reduces friction and increases workload migration onto the platform. Partnerships with OpenAI, Anthropic and Google Cloud are enabling more AI workloads to run directly within Snowflake's environment, further lifting consumption.

However, the consumption-based model means workload growth translates to revenue only when customers actively deploy at scale. The Zacks Consensus Estimate for SNOW's fiscal 2027 product revenues is pegged at $5.6 billion, up 26.13% year over year. The pace at which Snowflake Intelligence and Cortex Code scale into production-grade enterprise deployments will be the defining factor in whether AI workload expansion can truly strengthen the company's next leg of growth.

SNOW Faces Stiff Competition

Snowflake's AI-driven workload expansion faces meaningful competition from Alphabet GOOGL and Oracle ORCL. Alphabet's BigQuery and Vertex AI offer a tightly integrated analytics and AI stack within Google Cloud, making it a natural choice for GCP committed enterprises. Oracle competes through its autonomous database and OCI platform, leveraging its deep enterprise installed base to drive AI workload adoption within existing systems. Unlike Snowflake's cloud-agnostic consumption-based model, both Alphabet and Oracle benefit from deeper ecosystem entrenchment, posing a tangible headwind to Snowflake's workload expansion ambitions.

SNOW’s Share Price Performance, Valuation and Estimates

Snowflake shares have plunged 30.2% in the year-to-date period, underperforming the broader Zacks Computer & Technology sector and the Internet Software industry’s decline of 7.5% and 18.5%, respectively.

SNOW Stock Performance

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Snowflake stock is trading at a premium, with a forward 12-month Price/Sales ratio of 8.66 compared with the Internet Software industry’s 3.6. SNOW has a Value Score of F.

SNOW Valuation

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for SNOW’s fiscal 2027 earnings is pegged at $1.80 per share. The figure indicates a 44% year-over-year increase.

Snowflake Inc. Price and Consensus

Snowflake Inc. price-consensus-chart | Snowflake Inc. Quote

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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This article originally published on Zacks Investment Research (zacks.com).

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