Snowflake (SNOW) sparked renewed investor attention after announcing an integration with NVIDIA to streamline machine learning workflows. This move, along with building optimism for third quarter earnings, has fueled growing confidence in the company’s AI strategy.
See our latest analysis for Snowflake.
After a brief pullback last month, Snowflake’s share price has regained momentum, fueled by anticipation for its upcoming earnings and enthusiasm around its recent NVIDIA integration. With a year-to-date share price return of nearly 58% and a one-year total shareholder return of over 42%, both its short-term rally and long-term growth narrative are back in focus. This underscores renewed confidence in the company’s strategy and market potential.
If Snowflake’s surge has you curious about what else is gaining traction in tech and AI, now’s a great moment to discover See the full list for free.
With upbeat analyst sentiment and high expectations for Snowflake’s next earnings call, the central question now is whether the current rally leaves more room for gains. Is Snowflake’s recent momentum a fresh buying opportunity, or has future growth already been priced in by the market?
Snowflake’s most followed narrative values the company higher than its current closing price, highlighting market optimism for further gains. This perspective relies on anticipated growth catalysts and major industry shifts, presenting a compelling case for future performance.
Accelerating enterprise adoption of AI and advanced analytics is fueling incremental demand for Snowflake’s platform, as evidenced by nearly 50% of new customers citing AI as a primary driver, and over 25% of all deployed use cases leveraging AI. This sets up higher future revenue growth as companies increasingly budget for AI-driven workloads.
Curious what bold assumptions drive this valuation? One surprising forecast powers the entire price target. Hint: it is not just about top-line growth. Discover the hidden levers fueling Snowflake’s narrative and see what makes the story so provocative.
Result: Fair Value of $272.69 (UNDERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, Snowflake’s growth story still faces genuine threats, including rising competition from hyperscalers and lingering uncertainty around monetizing new AI-driven products.
Find out about the key risks to this Snowflake narrative.
While analyst narratives point to upside, a quick look at Snowflake’s current ratio versus peers highlights a caution flag. Snowflake’s sales ratio stands at 20.5x, higher than both the peer average of 20x and the broader US IT industry average of just 2.6x. This is also well above the fair ratio of 15x. This premium means investors are paying up for growth expectations, which could amplify downside risk if momentum slows. Are these expectations truly justified, or is there a disconnect in what the market is pricing in?
See what the numbers say about this price — find out in our valuation breakdown.
NYSE:SNOW PS Ratio as at Nov 2025
Want a different take or ready to dig into the details yourself? You can analyze the data and craft your own narrative in just a few minutes. Do it your way
A great starting point for your Snowflake research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.
Set yourself up for tomorrow’s success by acting today. Don’t let unique opportunities pass you by; these custom stock ideas put powerful investing trends at your fingertips.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include SNOW.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com