Core Viewpoint - Goldman Sachs maintains a "Buy" rating on Snowflake and raises the target price to $275, believing that market concerns over slowing revenue growth overshadow the company's robust core business and accelerated AI monetization [1][3]. Revenue Performance - Snowflake's latest earnings report shows a 29% year-over-year increase in product revenue, slightly exceeding market expectations, although the growth rate has slowed compared to the first half of the year [3][8]. - The company achieved a milestone by reaching an annualized AI revenue of $100 million a quarter ahead of schedule, with AI-related product adoption rates rising sharply [6][8]. Customer Retention and Growth Potential - The core customer retention rate (NER) remains healthy at 125%, indicating strong customer loyalty [5][8]. - Record new contract obligations (RPO) reached $949 million in the third quarter, with 615 new customers added, significantly surpassing the previous quarter's 343 [8]. AI as a Growth Catalyst - AI is viewed as a "force multiplier" for Snowflake's business, with over 1,200 customers currently using Snowflake Intelligence, the fastest adopted new product in the company's history [6]. - 50% of new bookings in the quarter were influenced by AI factors, and 58% of customers are using Snowflake's AI features weekly [6]. Market Sentiment and Valuation Discrepancies - While Goldman Sachs is optimistic about Snowflake's long-term prospects, Nomura expresses caution, suggesting that the current valuation reflects optimistic growth expectations and may face pressure if AI adoption slows [5][9]. - Nomura maintains a "Hold" rating with a target price of $238, arguing that the market has priced in perfect conditions for AI-driven growth, while also raising concerns about potential shifts in data analysis paradigms due to advancements in AI [9].

Core Insights - ISG has initiated a research study to evaluate provider capabilities within the expanding Snowflake services ecosystem, focusing on modernization and AI-driven transformation [1][14] - The upcoming ISG Provider Lens report, titled "Snowflake Ecosystem Partners," is set to be published in June 2026 and will assess companies that provide Snowflake-focused modernization and AI/ML enablement services [2][4] Provider Evaluation - Enterprises are increasingly prioritizing providers that demonstrate automation maturity, FinOps discipline, and strong governance, utilizing Snowflake-native tools like Snowpark and Cortex AI for significant improvements in data management [2][5] - The study will feature two quadrants: 1. Modernization and AI/ML Enablement Services, focusing on providers that offer comprehensive strategy, advisory, and implementation support for Snowflake investments [7] 2. Managed Data and Optimization Services, assessing providers that specialize in managing and optimizing Snowflake environments across cloud platforms [7] Research Methodology - ISG has distributed surveys to over 100 Snowflake ecosystem partners to gather data for the report, which will help enterprise buyers evaluate their vendor relationships and potential new engagements [3][5] - The report will include geographic insights covering the global Snowflake ecosystem and the products and services available worldwide [6] Company Background - ISG is a global AI-centered technology research and advisory firm, serving over 900 clients, including 75 of the top 100 enterprises globally, and is recognized for its expertise in technology and business services [10]

Core Viewpoint - Snowflake Inc. is positioned as a strong investment opportunity in the AI sector, with positive indicators for continued growth and product adoption, despite competitive pressures from Databricks [1][2][3]. Group 1: Financial Performance and Projections - Oppenheimer maintains an "Outperform" rating on Snowflake with a price target of $295, citing encouraging third-quarter checks and resilient AI/ML momentum [1]. - The firm anticipates revenue growth for Snowflake could approach 29-30%, potentially exceeding the consensus estimate of 25.6%, despite a challenging comparison from the previous quarter [3]. - Snowflake is expected to sustain a Net Revenue Retention (NRR) rate of 125%, indicating strong demand for its products and healthy consumption trends [3]. Group 2: Market Position and Competitive Landscape - Snowflake is experiencing broad-based consumption across various regions and verticals, which signals a strong quarter ahead [2]. - The company is seeing continued momentum for new tools such as Snowpark and Cortex, contributing to its positive outlook [3]. - Street expectations for product growth in the third quarter are modeled in line with guidance, suggesting beatable targets that could keep investors engaged [4].

Core Insights - The article highlights five AI-focused stocks in the Internet Software and Services sector that are expected to perform well in 2026, driven by increased IT spending and the growing demand for web-based infrastructure and applications [2][4]. Company Summaries Palantir Technologies Inc. (PLTR) - Palantir's AI strategy integrates its Foundry and Gotham platforms, promoting AI adoption in government and commercial sectors, with a focus on processing large datasets for real-time insights [5][6]. - The company is aligning its AI initiatives with U.S. defense priorities, showcasing its capabilities in high-profile projects like the Department of Defense's Open DAGIR [6]. - Palantir's AI Platform (AIP) has shown adaptability across various industries, with a strong customer base in government and large corporations [7][8]. - Expected revenue and earnings growth rates for Palantir are 41.1% and 43% respectively for the next year, with a 20.9% improvement in earnings estimates over the past week [9]. Snowflake Inc. (SNOW) - Snowflake is positioned to benefit from the rising demand for cloud-based data platforms, with its AI Data Cloud unifying structured and unstructured data [11]. - The cloud analytics market is projected to grow from $35.39 billion in 2024 to $130.63 billion by 2030, indicating a 25.5% CAGR, which supports Snowflake's growth trajectory [12]. - Snowflake's platform is gaining traction among large enterprises, enhancing their ability to manage data and improve customer experiences [13][14]. - Expected revenue and earnings growth rates for Snowflake are 22.3% and 33.9% respectively for the next year, with a 4% improvement in earnings estimates over the last 60 days [15]. Datadog Inc. (DDOG) - Datadog is experiencing growth due to new customer additions and increased adoption of its cloud-based monitoring platform amid digital transformation [16]. - The company unveiled over 125 new products at DASH 2025, including AI observability tools, which enhance customer engagement and competitive positioning [17][18]. - Datadog's expected revenue and earnings growth rates are 19% and 15.4% respectively for the next year, with a 0.9% improvement in earnings estimates recently [20]. Atlassian Corp. (TEAM) - Atlassian is benefiting from the demand for remote working tools, with significant adoption of its AI-powered features, showing a 25X year-over-year increase in AI interactions [21][22]. - The company's focus on generative AI features is expected to drive long-term revenue growth, particularly through collaborations with OpenAI [23]. - Expected revenue and earnings growth rates for Atlassian are 20.8% and 27.7% respectively for the current year, with a 0.6% improvement in earnings estimates recently [24]. Zoom Communications Inc. (ZM) - Zoom is capitalizing on the hybrid work trend, with AI-driven solutions like Zoom Doc and AI Companion seeing significant user growth [25][26]. - The AI Companion has achieved a fourfold increase in monthly active users year-over-year, enhancing operational efficiencies for customers [26][27]. - Expected revenue and earnings growth rates for Zoom are 3% and 0.1% respectively for the next year, with a 3.9% improvement in earnings estimates over the last 60 days [28].

Core Insights - The second-quarter fiscal 2026 earnings season has shown results exceeding market expectations, particularly for MongoDB Inc. and Snowflake Inc. [1][2] MongoDB Inc. - MongoDB reported quarterly revenues of $591.4 million, surpassing the Zacks Consensus Estimate of $551.1 million, with adjusted earnings per share of $1 exceeding the estimate of $0.64 [3][4] - Subscription revenues reached $572.36 million, reflecting a year-over-year increase of 23.4%, with MDB Atlas subscription revenues at $438.97 million, up 29.2% year-over-year [3][4] - The company provided strong guidance for the third quarter, with a revenue midpoint of $589.5 million, and highlighted a significant market opportunity, owning only 2% of an estimated $100 billion total addressable market [4][5] - MongoDB's focus on cloud-based database software and its Atlas platform has driven demand, particularly among larger enterprises, enhancing sales efficiency and customer acquisition [5][6] Snowflake Inc. - Snowflake reported quarterly revenues of $1.14 billion, exceeding the Zacks Consensus Estimate of $1.09 billion, with adjusted earnings per share of $0.35 surpassing the estimate of $0.26 [8][9] - Product revenue, which is central to Snowflake's business, was $1.09 billion, up 31.5% year-over-year, and the company raised its fiscal 2026 product revenue guidance to $4.40 billion from a previous forecast of $4.33 billion [8][9] - Snowflake is positioned to benefit from the growing demand for cloud-based data platforms, with its AI Data Cloud unifying structured and unstructured data, enhancing real-time analytics capabilities [10][12] - The cloud analytics market is projected to grow from $35.39 billion in 2024 to $130.63 billion by 2030, indicating a 25.5% CAGR, driven by enterprises transitioning to scalable platforms [11][12]

Core Insights - Snowflake (SNOW) is well-positioned to capitalize on the increasing demand for cloud-based data platforms, particularly through its AI Data Cloud, Snowpark, and Dynamic Tables, which enhance developer use cases and enable real-time analytics [1][9] Industry Outlook - The cloud analytics market is projected to grow from $35.39 billion in 2024 to $130.63 billion by 2030, representing a 25.5% CAGR, driven by enterprises moving from legacy systems to scalable platforms for managing data and analytics [2][9] Company Performance - The Zacks Consensus Estimate for Snowflake's second-quarter fiscal 2026 product revenues is $1.04 billion, an increase from $829.3 million in the same quarter last year, indicating strong demand for its cloud analytics solutions [3] - Snowflake's shares have increased by 27.5% year to date, outperforming the broader Zacks Computer & Technology sector's return of 12.5% and the Zacks Internet Software industry's increase of 19.3% [7] Competitive Landscape - The cloud data analytics market is highly competitive, with MongoDB (MDB) and Oracle (ORCL) emerging as significant competitors to Snowflake, each offering analytics-focused cloud platforms [4][5][9] - MongoDB's Atlas platform and Oracle's Cloud Infrastructure and Autonomous Database are both targeting similar markets, creating competitive pressure on Snowflake [6][9] Valuation Metrics - Snowflake's stock is trading at a forward 12-month Price/Sales ratio of 12.93X, significantly higher than the industry average of 5.72X, indicating a premium valuation [11] - The Zacks Consensus Estimate for Snowflake's second-quarter fiscal 2026 earnings is 26 cents per share, reflecting a year-over-year increase of 24.91% [14]

Core Insights - Snowflake's stock surged due to the ongoing AI frenzy, with a year-to-date gain of 26%, positioning the company as a key player in the AI data cloud market [1] - Major tech companies like Meta, Microsoft, and Alphabet are increasing their investments in AI, which is expected to enhance Snowflake's revenue and market position [2] Financial Performance - Bank of America Securities analyst upgraded Snowflake's stock from Neutral to Buy, raising the price forecast from $220 to $240, citing strong growth potential [3] - The analyst noted strong momentum in Snowflake's core offerings, including Cortex AI and Snowpark, and highlighted that shares trade at a reasonable 1.5 times calendar 2026E FCF multiple adjusted for growth [4] Revenue Projections - The second-quarter product revenue is projected at $1.064 billion, exceeding Snowflake's guidance of $1.038 billion, driven by increased web traffic and demand for AI-related workloads [5] - Earnings estimates have been raised, with projected EPS for 2026 at $0.95, 2027 at $1.17, and 2028 at $1.52, reflecting positive growth expectations [5] Customer Sentiment - A recent survey indicated that Snowflake customers plan to increase spending by 12% over the next 12 months, showing a significant acceleration in demand for AI workloads and new products [6]

Core Insights - Snowflake (SNOW) and Oracle (ORCL) are at the forefront of modernizing enterprise data infrastructure to accommodate large-scale AI workloads [1][2] - The global cloud data platform market is projected to grow from $22.78 billion in 2025 to $104.50 billion by 2033, with a CAGR of 24.3% [2] Snowflake Overview - Snowflake is designed as a core platform for AI-driven data workloads, supporting deployment across major public clouds and integrating structured and unstructured data [3] - In Q1 of fiscal 2026, Snowflake reported $996.8 million in product revenue, a 26% year-over-year increase, with expectations for Q2 product revenue at $1.04 billion [5][6] - Over 5,200 customer accounts utilized Snowflake's AI and ML features weekly in Q1, indicating strong adoption [4] Oracle Overview - Oracle is developing a vertically integrated platform for AI workloads, combining cloud infrastructure with autonomous databases and industry-specific applications [7] - In Q4 of fiscal 2025, Oracle's total cloud revenue increased by 27% year-over-year to $6.7 billion, with cloud infrastructure revenues growing by 62% [11] - The Zacks Consensus Estimate for Oracle's Q1 fiscal 2026 cloud services and license revenue is $12.21 billion [12] Comparative Analysis - Snowflake trades at a higher valuation of 13.64X forward Price/Sales compared to Oracle's 10.43X, reflecting its premium positioning in the market [16] - The Zacks Consensus Estimate for Snowflake's fiscal 2026 earnings is $1.06 per share, indicating a 27.71% year-over-year increase, while Oracle's estimate is $6.73 per share, reflecting an 11.61% increase [18] - Snowflake's focused, cloud-native platform is seen as more advantageous for AI-driven analytics compared to Oracle's broader, legacy-dependent approach [19]

Summary of Conference Call Records Industry or Company Involved - Focus on the SaaS (Software as a Service) industry and specific companies such as ServiceNow, SAP, Salesforce, Palantir, and others in the context of generative AI and cloud computing. Core Points and Arguments 1. The US software index has only increased by approximately 40% over the past two years, primarily due to valuation fluctuations rather than significant improvements in fundamentals [1][2] 2. The macroeconomic environment, conservative IT budgets, and the encroachment of AI-native technologies on SaaS market share are major factors affecting the industry [1][2] 3. Companies like ServiceNow and SAP are performing strongly despite the overall market challenges, showcasing independent growth potential [2][5] 4. Generative AI enhances existing user and content ecosystems in consumer scenarios rather than creating new revenue models [1][6] 5. In the B2B market, there is a trend towards integration driven by customer budget constraints and AI [1][9] 6. The importance of data management has increased, with companies adopting proprietary databases to ensure AI accuracy, leading to the concept of a "Unified Data Layer" [1][11] 7. Traditional software companies like SAP and Oracle are accelerating their transition to cloud services to meet AI data access needs [1][12] 8. Companies such as ServiceNow and Salesforce are valued highly due to their sustainable growth potential and strong competitive positions [1][13] 9. The blurring of business boundaries among software companies may lead to market erosion, necessitating a bottom-up stock selection strategy [1][15][16] 10. ServiceNow and SAP are highlighted as strong competitors in enterprise management software due to their capabilities in information and financial alignment [1][17] Other Important but Possibly Overlooked Content 1. The generative AI landscape in consumer applications is primarily about enhancing existing ecosystems rather than direct monetization [1][6] 2. Companies like Google and Meta leverage AI to increase user engagement and advertising revenue without direct subscription fees [1][7] 3. The data services industry is entering a favorable cycle due to increased demand for cloud data [1][3][20] 4. Snowflake is positioned as a data hub benefiting from AI developments, with its growth stabilizing and potential for a market turnaround [1][23] 5. Oracle faces significant challenges in breaking the dominance of major cloud service providers due to their established market presence and capabilities [1][25][26] 6. Cloudflare shows potential in network security and edge computing, but its future market share remains uncertain [1][27] 7. The commercialization of code assistance tools is rapid but faces limitations due to competition and market saturation [1][28] 8. AI combined with automation can provide actionable insights for decision-making, enhancing the overall value proposition for software companies [1][29][30]

Core Insights - Snowflake (SNOW) and Microsoft (MSFT) are significant players in the growing cloud data platform market, with Snowflake offering a scalable data warehouse and Microsoft providing a suite of data services on Azure [1][2] Market Overview - The global cloud data platform market was valued at $22.78 billion in 2025 and is projected to reach $104.50 billion by 2033, reflecting a CAGR of 24.3% [2] Microsoft (MSFT) Analysis - Microsoft Cloud revenue reached $42.4 billion in Q3 of fiscal 2025, up 20% year over year, with Azure and other cloud services growing 33% year over year [3] - Nearly 60% of Fortune 500 companies use PostgreSQL on Azure, and Cosmos DB showed steady growth supported by major customers [5] - Microsoft’s Fabric, a unified analytics solution, served over 21,000 paid customers, up 80% year over year, with OneLake seeing data volumes increase more than six times compared to the prior year [6][10] - Microsoft is well-positioned to lead in cloud data infrastructure due to strong enterprise demand and an integrated platform [7] Snowflake (SNOW) Analysis - In Q1 of fiscal 2026, Snowflake's product revenues rose 26% year over year to $996.8 million, with a net revenue retention rate of 124% [8] - Snowflake's platform supports a unified data experience across storage, processing, governance, and AI, with offerings like Snowpark and the Native App Framework [9][11] - Snowflake is enhancing its platform for modern analytics and AI workloads, with partnerships and features that improve cost efficiency and performance [10][11] Price Performance and Valuation - Year-to-date, SNOW shares have increased by 43.5%, while MSFT shares have appreciated by 18.3% [12] - Snowflake trades at 14.94X forward 12-month Price/Sales, compared to Microsoft's 11.7X, indicating a higher valuation for Snowflake [15] Earnings Estimates - The Zacks Consensus Estimate for SNOW's fiscal 2026 earnings is $1.06 per share, indicating a 27.71% increase year over year [18] - The Zacks Consensus Estimate for MSFT's 2025 earnings is $13.36 per share, indicating a 13.22% increase year over year [19] Investment Outlook - Microsoft is viewed as a more attractive investment due to its broader product ecosystem and strong growth driven by Azure, while Snowflake faces near-term valuation concerns and competition [20][21]