Snowflake Q2 Earnings Preview: Analysts Expect 50% YoY EPS Growth and 25% Revenue Growth

Snowflake (SNOW) is set to report Q2 FY26 earnings after the market closes on August 27. Wall Street expects EPS of $0.27, a 50% YoY jump, and revenue growth of 25% to $1.09 billion. The company has exceeded earnings expectations in eight out of the past nine quarters. Analysts are bullish on Snowflake's unified data platform positioning and AI-related wallet share. However, intense competition from Databricks and the lack of profitability impact valuation negatively.

Snowflake Inc. (SNOW), the leading cloud data platform provider, is set to report its second-quarter fiscal 2026 (FY26) earnings after the market closes on August 27. Wall Street analysts anticipate earnings per share (EPS) of $0.27, a 50% year-over-year (YoY) jump, and revenue growth of 25% to $1.09 billion [1]. The company has consistently exceeded earnings expectations in eight out of the past nine quarters, reflecting strong performance and growth.

Analysts are optimistic about Snowflake's unified data platform positioning and its growing share of the AI market. TD Cowen analyst Derrick Wood reiterated a Buy rating on SNOW stock with a price target of $240, expecting another solid beat in Q2 FY26 [1]. Similarly, Citi analyst Tyler Radke increased his price target to $250, maintaining a Buy rating and expecting growth reacceleration in the second half of the year [1]. However, TipRanks' AI analyst assigned a Neutral rating with a price target of $205, indicating about 4.2% upside potential [1].

The AI boom is driving demand for Snowflake's products, with the stock rising more than 27% year-to-date. However, intense competition from rival Databricks is a concern. Databricks, another leading data analytics company, is growing at a faster rate (50% YoY) compared to Snowflake's 26% growth [4]. Despite the competition, Snowflake has shown resilience and continued to attract customers, with 606 customers reporting product revenue greater than $1 million as of the end of Q1 FY26 [1].

Snowflake's AI strategy is a key factor driving its growth. The company is integrating machine intelligence closer to trusted enterprise data, enabling seamless transitions from data ingestion to insights. Recent innovations like Cortex AISQL expand traditional SQL into multimodal AI, allowing analysts to query documents, images, and audio [2]. Additionally, Snowflake's AI portfolio blends Anthropic, OpenAI, and fine-tuned Llama and Mistral models, providing customers with flexibility between open-source and frontier options [2].

While analysts are bullish on Snowflake's long-term prospects, the lack of profitability impacts valuation negatively. Snowflake's consumption-based revenue model and intense competition from companies like Databricks pose challenges. However, the company's strong customer demand and new products make it an attractive investment for those looking to capitalize on the AI boom [2].

Investors interested in building an AI-focused portfolio may consider Snowflake as a key holding. Four AI-focused ETFs have recently acquired shares in Snowflake, Astera Labs Inc., Oracle Corp., and Alphabet Inc., reflecting the growing demand for AI infrastructure and cloud data platforms [3]. However, it is essential to conduct thorough research and consider individual risk tolerance and investment objectives before making any investment decisions.

References:
[1] https://www.tipranks.com/news/snowflake-snow-is-about-to-report-q2-earnings-heres-what-to-expect
[2] https://www.ainvest.com/news/bofa-analyst-upgrades-snowflake-buy-q2-earnings-2508/
[3] https://www.ainvest.com/news/ai-etf-top-holdings-snowflake-astera-oracle-nvidia-lead-2508/
[4] https://www.saastr.com/databrickscheap/