The Zacks Analyst Blog Snowflake, Microsoft, Amazon and ServiceNow

Core Viewpoint - Snowflake has shown exceptional performance with a 71.4% year-to-date surge, significantly outperforming its industry peers and reflecting strong investor confidence in its execution and growth potential in AI data cloud opportunities [2][3]. Company Performance - Snowflake's stock has outperformed industry peers like Microsoft (20.3% increase), Amazon (14% increase), and ServiceNow (17% decline) due to consistent revenue acceleration and a differentiated consumption model [3]. - The Zacks Consensus Estimate for Snowflake's Q3 fiscal 2026 revenues is $1.18 billion, representing a 25.4% year-over-year increase [5]. - The estimated earnings for Q3 fiscal 2026 are 31 cents per share, indicating a 55% year-over-year increase [11]. Competitive Advantage - Snowflake's competitive moat is strengthened by its AI-driven innovations, which enhance customer stickiness and differentiate it from competitors tied to broader application ecosystems [6][4]. - The company's AI Data Cloud is becoming essential for enterprises transitioning to unified data platforms, combining governance, analytics, and machine learning [4][7]. Growth Drivers - Snowflake's expanding enterprise ecosystem, including collaborations with Microsoft Azure and Amazon Web Services, is enhancing its global footprint and accelerating enterprise adoption [8]. - The Zacks Consensus Estimate for total customers in Q3 fiscal 2026 is 12,482, a 21.8% year-over-year increase, indicating deepening relevance in the enterprise data stack [9]. Valuation Metrics - Snowflake's forward price-to-sales multiple is 16.65X, significantly higher than the industry average of 5.09X and the sector average of 6.92X, reflecting its unique positioning as a high-growth, AI-driven data platform [10]. - The combination of healthy growth, operating discipline, and expanding margins supports Snowflake's premium valuation, reinforcing confidence in its sustained growth potential [12]. Conclusion - Snowflake's robust execution, rising enterprise adoption, and AI integration position it as a compelling growth story in the software space, with a balance of scale, innovation, and profitability [13].