Snowflake Rides on Growing Customer Base: More Upside Ahead?

Snowflake SNOW is benefiting from a rapidly expanding customer base, which is fueling both its top-line growth and strong momentum in the enterprise AI and data cloud markets. In the fiscal fourth quarter of 2026, the company highlighted that Snowflake now serves more than 13,300 customers, having added 2,332 net new customers in the past year alone.SNOW is benefiting from strong adoption and increasing platform usage, as reflected by a net revenue retention rate of 125% in the fourth quarter of fiscal 2026. In the same quarter, Snowflake added 740 net new customers, up 40% year over year. The company now has 733 customers spending more than $1 million annually, up 27% year over year, and 56 customers spending more than $10 million annually, up 56% year over year.Snowflake’s product innovation is a key driver behind this customer momentum. The launch of Snowflake Intelligence and Cortex Code has significantly expanded the platform’s capabilities, making it easier for both business users and developers to build and deploy AI-native applications. In the fourth quarter of fiscal 2026, the company highlighted that more than 4,400 customers are already using Cortex Code, and Snowflake Intelligence has become essential for more than 2,500 accounts just weeks after launch.The company’s strategic partnerships with leading AI providers, including OpenAI, Anthropic and Google Cloud, further enhance its value proposition by offering customers access to the latest AI models natively within the Snowflake platform.Snowflake’s growing customer base, combined with its rapid product innovation and strong go-to-market execution, positions the company for continued upside. For the first quarter of fiscal 2027, Snowflake expects product revenues in the range of $1.262-$1.267 billion. The projection range indicates year-over-year growth of 27%.SNOW Suffers From Stiff CompetitionSnowflake is facing stiff competition from major players such as Alphabet GOOGL and Amazon AMZN. Both Alphabet and Amazon are expanding their footprints in the cloud analytics space.Alphabet has been growing rapidly in the booming cloud-computing market. In the first quarter of 2026, Alphabet's cloud revenues surged 63% year over year to roughly $20 billion. This acceleration is largely fueled by enterprise adoption of generative AI offerings such as Gemini, with revenue from AI-based cloud products growing nearly 800% year over year.Amazon continues to see strong demand for its cloud services. In the first quarter of 2026, Amazon Web Services (AWS) announced new agreements with major enterprises, including OpenAI, Anthropic, Meta Platforms, NVIDIA, Uber, U.S. Bank, Fox Corporation, Southwest Airlines, U.S. Army, Bloomberg, Cerebras, AT&T, DTCC, Nokia, The National Geographic Society, NEURA Robotics, DXC, PGA TOUR, O2 Telefónica, NTT DOCOMO, and many more.SNOW’s Share Price Performance, Valuation, and EstimatesSnowflake shares have lost 23.9% in the year-to-date period, underperforming the broader Zacks Computer & Technology sector’s increase of 14.8% and the Internet Software industry’s decline of 13.7%.SNOW Stock's PerformanceImage Source: Zacks Investment ResearchSnowflake stock is trading at a premium, with a forward 12-month Price/Sales ratio of 9.14X compared with the Internet Software industry’s 3.7X. SNOW has a Value Score of F.SNOW's ValuationImage Source: Zacks Investment ResearchThe Zacks Consensus Estimate for SNOW’s fiscal 2027 earnings is pegged at $1.81 per share, which has been unchanged over the past 30 days. The figure indicates a 44.8% year-over-year increase. Snowflake Inc. Price and Consensus Snowflake Inc. price-consensus-chart | Snowflake Inc. QuoteSnowflake currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.Free: See Our Top Stock And 4 Runners UpThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks