Snowflake Stock Rides on Cortex AI Adoption: Can the Growth Continue?

Core Insights - Snowflake's Cortex platform is experiencing significant growth as enterprises increase investments in AI-native applications, contributing to a 26% year-over-year rise in product revenues to $996.8 million in Q1 of fiscal 2026, surpassing estimates by 6.71% [1][10] Group 1: Cortex Platform Features and Adoption - Cortex is designed to facilitate both internal workflows and customer-facing applications, allowing users to create AI tools using plain language and automate responses to queries within Snowflake's secure environment [2] - Enhancements like Cortex AISQL and Knowledge Extensions are enabling users to query data using natural language and ground large language models in company-specific contexts, enhancing the platform's utility [3] - The platform has surpassed 5,200 weekly active accounts, indicating growing enterprise usage and demand for in-platform AI assistants, as seen with companies like Kraft Heinz and Luminate Data leveraging Cortex for various applications [4][10] Group 2: Competitive Landscape - Snowflake's Cortex platform faces increasing competition from C3.ai and ServiceNow, both of which are expanding their offerings in the enterprise AI assistant market [5] - C3.ai is enhancing its Generative AI Suite with industry-specific tools, focusing on enterprise-grade AI applications, which positions it as a direct competitor to Cortex [6] - ServiceNow is embedding generative AI across various sectors through its Now Assist platform, which overlaps with Snowflake's vision for enterprise productivity [7] Group 3: Financial Performance and Valuation - Snowflake's stock has appreciated 46.2% year-to-date, significantly outperforming the broader Zacks Computer & Technology sector and the Zacks Internet Software industry [8] - The company's forward 12-month Price/Sales ratio stands at 15.22X, indicating a premium valuation compared to the industry average of 5.85X [12] - The Zacks Consensus Estimate for Snowflake's fiscal 2026 earnings is $1.06 per share, reflecting a year-over-year increase of 27.71% [15]