Snowflake’s SNOW Cortex AI platform is seeing growing enterprise adoption and is increasingly viewed as a key driver of its consumption-led revenue model. In the second quarter of fiscal 2026, over 6,100 accounts used Snowflake’s AI features weekly, up 17% sequentially. AI deployments contributed to 50% of new customer additions, with 25% of all deployed use cases incorporating AI, indicating broadening usage across business functions.
Cortex AI’s capabilities are being expanded through offerings such as Cortex AI SQL and integrations with advanced models like GPT-5, enabling additional revenue generation within Snowflake’s consumption-based model. Enterprises such as Thomson Reuters and BlackRock have adopted Cortex AI to support AI-powered agents and improve client service, reflecting the platform’s ability to deliver value at scale. Snowflake Intelligence is also being utilized to extend natural language access to enterprise data, making AI more accessible to non-technical users.
This AI-led momentum is increasingly being reflected in SNOW’s recently reported performance. In the second quarter of fiscal 2026, product revenues rose 31.5% year over year to $1.09 billion, supported by a healthy net revenue retention rate of 125%. Remaining Performance Obligations stood at $6.9 billion, up 33% from the year-ago period, while the count of customers spending over $1 million annually reached 654.
The Zacks Consensus Estimate for third-quarter product revenue is pegged at $1.12 billion, up 24% from the prior-year figure. The consensus mark for RPOs is pegged at $7.33 billion, up 29% year over year. As Cortex AI adoption deepens and generative AI workloads scale, Snowflake appears well-positioned for further upside.
SNOW Faces Rising Competition in Enterprise AI
Snowflake’s push into enterprise AI through Cortex AI is drawing competitive pressure from ServiceNow NOW and Salesforce CRM. ServiceNow is expanding AI across enterprise workflows, targeting automation and decision support in structured business environments. Its platform-centric model offers an alternative to Snowflake’s data-first approach. Salesforce is scaling AI across analytics and customer operations, emphasizing usability and integration. As Cortex AI adoption grows, both ServiceNow and Salesforce are intensifying their AI focus, posing increasing challenges to Snowflake in the race to power enterprise-wide AI transformation.
SNOW’s Share Price Performance, Valuation and Estimates
Snowflake shares have appreciated 56.1% year to date, outperforming the broader Zacks Computer & Technology sector’s return of 13.4% and the Zacks Internet Software industry’s increase of 18.8%.
SNOW's YTD Price Performance
Image Source: Zacks Investment Research
Snowflake stock is trading at a premium, with a forward 12-month Price/Sales of 15.79X compared with the industry’s 5.65X. SNOW has a Value score of F.
SNOW's Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for SNOW’s third-quarter fiscal 2026 earnings is pegged at 28 cents per share, unchanged over the past 30 days. The figure indicates a 40% increase year over year.
Snowflake Inc. Price and Consensus
Snowflake Inc. price-consensus-chart | Snowflake Inc. Quote
Snowflake currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
