The Motley Foolยท2025-09-01 01:05Core Viewpoint - Snowflake has significantly outperformed Nvidia in the past year, driven by strong demand for its AI database products and a robust growth trajectory in its customer base and revenue [1][10]. Company Performance - Snowflake's revenue increased by 32% year-over-year to $1.1 billion in the last quarter, with a three percentage point acceleration from the previous year [7]. - The company's adjusted earnings nearly doubled to $0.35 per share, reflecting a six percentage point growth in its non-GAAP operating margin [9]. - Snowflake's customer base grew by 19% year-over-year, with over half of its customers utilizing its AI solutions [7][8]. AI Strategy - The adoption of Snowflake's AI tools has been a key driver of its growth, influencing nearly 50% of new customer acquisitions in Q2 [8]. - The company reported a net revenue retention rate of 125%, indicating increased spending from existing customers [8]. Market Outlook - Snowflake's remaining performance obligations (RPO) rose by 33% to $6.9 billion, prompting an increase in its fiscal 2026 product revenue forecast to $4.4 billion [10]. - The total addressable market (TAM) for Snowflake is expected to exceed $355 billion by 2029, suggesting substantial growth potential [11]. Comparative Analysis - Snowflake's stock has surged by 108% over the past year, significantly outperforming Nvidia's 40% gain [10]. - Analysts predict that Snowflake's earnings growth will continue to outpace Nvidia's, which reported a 54% year-over-year growth last quarter [12]. - Snowflake's price-to-sales ratio of 19 is more attractive compared to Nvidia's ratio of 30, indicating potential for further investment [13].