Snowflake stock (NYSE:SNOW) has been one of the hottest names in enterprise software and cloud computing this year. With shares up nearly 60% in 2025 and over 120% in the past 12 months, investors are asking the big question: is there still room to run, or has the easy money already been made?
Snowflake Stock: Growth Driven by Simplicity and Customer Value
At its core, Snowflake is a cloud-based data platform that helps businesses manage, analyze, and gain insights from massive amounts of information. Its appeal lies in simplicity—customers can consolidate diverse data into one unified environment, saving both time and resources.
This value proposition has drawn major enterprise clients such as Booking Holdings (NASDAQ:BKNG), Hyatt Hotels (NYSE:H), and Intercontinental Exchange (NYSE:ICE). In the second quarter of fiscal 2026, Snowflake reported product revenue of $1.09 billion, a 32% year-over-year increase.
The company also highlighted robust customer momentum, with remaining performance obligations (RPO) up 33% to $6.9 billion and a net revenue retention rate (NRR) of 125%. Notably, Snowflake now serves more than 12,000 customers, including 654 clients contributing over $1 million in annual revenue.
Financials: High Growth With Profitability Challenges
While Snowflake stock benefits from strong adoption, profitability remains a sticking point. The company reported a net loss of $0.89 per share in Q2. However, adjusted product gross margins remained healthy at 76.4%.
Snowflake also generated $67.8 million in adjusted free cash flow, and management expects this figure to rise significantly in the second half of the year as large renewals and deal pipelines materialize. With $4.6 billion in cash and investments, Snowflake has ample liquidity to fuel innovation and expansion.
AI at the Core of Snowflake Stock’s Growth
A major reason for enthusiasm around Snowflake stock is its deep integration with artificial intelligence. The company recently launched Snowflake Intelligence, a tool allowing natural language queries across structured and unstructured data.
AI has already influenced nearly half of Snowflake’s new customer wins in Q2, while 25% of workloads now involve AI use cases. Over 6,100 accounts leverage Snowflake’s AI capabilities weekly.
Additionally, innovations like Cortex AI SQL allow customers to run AI models natively within Snowflake’s platform, reducing data movement risks and costs. This positions Snowflake as a central player in the rapidly expanding AI-data ecosystem.
Analyst Views: Is Snowflake Stock Still a Buy?
Wall Street remains broadly bullish on Snowflake stock. Out of 44 analysts covering the company, 35 rate it a “Strong Buy,” three recommend a “Moderate Buy,” five suggest a “Hold,” and only one has issued a “Strong Sell.”
The average analyst target price is $231.43, slightly below the current trading price. However, the high-end target of $262 implies as much as 9% potential upside over the next year.
This mixed sentiment reflects both confidence in Snowflake’s long-term potential and concerns about near-term valuation.
The Bottom Line: Should You Buy Snowflake Stock?
The bull case for Snowflake stock centers on its unique positioning at the crossroads of data and AI, sticky recurring revenue model, and significant adoption runway among global enterprises.
On the other hand, profitability challenges, stiff competition from hyperscale cloud providers like Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), and Alphabet (NASDAQ:GOOGL), and the risk of slower growth as the company scales remain valid concerns.
For long-term investors with high risk tolerance, Snowflake stock may still offer attractive upside potential. With AI adoption accelerating and enterprise demand holding strong, Snowflake’s story is far from over.
Featured Image: Megapixl
