Snowflake Is Growing at 37%. The AI Data Cloud Bet Is Starting to Pay Off.

Key Stats for Snowflake Stock

• 52-Week Range: $118.30 to $384.56
• Street Mean Target: ~$413
• TIKR Model Target (Mid): ~$884
• Market Cap: ~$118.2 billion
• LTM Gross Margin: 67.0%
• NTM EV/EBITDA: ~87x
• Fwd 2-Yr Rev CAGR: ~31%
• Fwd 2-Yr EPS CAGR: ~55%

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Snowflake Just Delivered Its Third Consecutive Quarter of Accelerating Growth.

Snowflake (SNOW) started life as a cloud data warehouse, a place where companies store and query massive amounts of data without managing their own infrastructure. It has since become far more ambitious. The company now calls itself the AI Data Cloud, a platform where enterprises store data, run AI models, build applications, and share information securely across organizational boundaries.

That repositioning matters because every major enterprise software vendor is rushing to embed AI into its stack, and Snowflake’s pitch is to be the neutral data layer underneath it all.

The results are starting to reflect that ambition. In the second quarter of fiscal 2027, product revenue came in at $1.49 billion, up 37% year over year, marking the third consecutive quarter of re-accelerating growth.

Total revenue reached $1.55 billion, with 828 customers generating more than $1 million in trailing twelve-month product revenue, up 27% from the prior year. Remaining performance obligations, which represent contracted future revenue not yet recognized, reached $6.07 billion, up 36%.

CEO Sridhar Ramaswamy described the quarter as evidence of a “flywheel effect across the business,” with AI workloads driving both new customer additions and deeper consumption among existing accounts. Non-GAAP operating margin came in at 14.5%, ahead of the company’s own guidance of 13.5%.

Consensus estimates project revenue of around $6.3 billion in fiscal 2027, climbing toward roughly $15.3 billion by fiscal 2031. The compounding reflects the consumption-based model: as customers run more workloads through Snowflake’s platform, revenue grows without requiring new contracts, making retention and expansion the primary growth engine.

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EPS Is Still Modest. The Trajectory Is the Point.

Snowflake’s earnings history follows the familiar arc of high-growth cloud companies: losses while building the platform, then a gradual emergence into profitability as scale absorbs fixed costs.

Normalized EPS was negative in fiscal 2021, turned positive in fiscal 2022, and has built steadily since, reaching $1.25 in the most recent fiscal year ending January 2026.

Estimates from here step up considerably, with consensus projecting normalized EPS of around $2.22 in fiscal 2027, roughly $3 in fiscal 2028, $4.21 in fiscal 2029, and approaching $6.50 by fiscal 2031.

Each incremental dollar of product revenue carries meaningfully higher margins than the last because the underlying infrastructure is already built, and that operating leverage is what makes the earnings trajectory so steep relative to the revenue growth rate.

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What Does the Valuation Model Say?

The TIKR valuation model applies roughly 22% annual revenue growth through fiscal 2031, with net income margins expanding toward 16%, arriving at a mid-case target of around $884 per share, implying roughly 165% total return from current levels at an annualized IRR of around 25% per year.

The 22% revenue growth assumption is worth noting: it is actually conservative relative to recent actuals, where Snowflake has been compounding at 29% to 51% annually, with the most recent quarter at 37%. The margin expansion from current non-GAAP operating margins of around 14% toward 16% net income is similarly grounded.

The Street’s nearer-term mean target of around $413 implies roughly 24% upside, and the model’s higher figure reflects what the compounding looks like over a longer horizon if growth and margin assumptions hold.

Should You Buy Snowflake Stock?

The bull case is straightforward: Snowflake is accelerating growth in the middle of an AI infrastructure buildout, on a consumption model that scales automatically as enterprises run more workloads, while expanding margins simultaneously.

The platform’s neutrality across AWS, Azure, and Google Cloud is a genuine competitive advantage, and CEO Ramaswamy’s focus on the Agentic Enterprise, where AI agents run natively on Snowflake’s platform, opens a credible new workload category beyond traditional analytics.

The bear case centers on valuation and competition. At roughly 87 times forward EBITDA and over 130 times forward GAAP earnings, Snowflake is priced for continued execution with little room for error.

Databricks, a private competitor with a similarly broad data and AI platform, is growing aggressively and reportedly preparing for an IPO. AWS, Azure, and Google all offer native data services that compete at the margin, and any consumption slowdown would compress the multiple well before earnings could absorb it.

Snowflake has spent years building the infrastructure layer enterprises need to run AI at scale, and the growth numbers suggest that investment is compounding.

The valuation demands patience and a high tolerance for premium pricing. Investors who believe the AI Data Cloud category will be as large as Ramaswamy envisions, and that Snowflake holds its position within it, will find a compelling long-term setup here.

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Disclaimer:

Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!