What Is Snowflake Stock’s Biggest Opportunity?

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Shares of Snowflake (SNOW) returned 136.7% from April 28 to October 27, 2026, against 8.8% for the S&P 500. Buyers may be betting that the company’s faster sales growth will last, and management ties much of that growth to AI. Sustaining that pace requires two AI products Snowflake built itself to keep winning customers, along with higher customer spending across the core data platform business. So what are those two products, and are customers using them?

What Are Snowflake’s Own AI Products Adding?

Management says the latest quarter brought a meaningful step up in AI revenue, and Snowflake’s own AI products, Cortex Code and CoWork, are quickly adding customers. Cortex Code reached 5.8 thousand accounts in fiscal Q2 2027, up nearly 11% from the quarter before. Meanwhile, CoWork passed 9.1 thousand accounts, with more than 2,000 added in that quarter alone.

Snowflake’s revenue growth accelerated in each of the last three quarters, climbing from 28.7% in fiscal Q3 2026 to 35.1% in fiscal Q2 2027. During the September 2, 2026 call, management said its AI products contributed about half of the acceleration it is seeing, while also naming faster migrations and other products.

Snowflake Says AI Users Spend More Across Its Platform

Customers using AI on Snowflake consume more across the data platform, management said on the same call. That usage would matter for almost the whole company, since product revenue made up 95.5% of Snowflake’s total revenue in fiscal 2026. Management also pointed to continued strength in the core data platform business in the second quarter.

It then raised its forecast for fiscal 2027 product revenue to $6.07 billion, or 36% growth, with about 1 point of that growth coming from its Observe acquisition.

Snowflake trades at 21.7 times its last twelve months of sales, against 3.2 times for the S&P 500. The stock closed on October 27 at 8.5% below its highest close of the past year, set on October 9. At 21.7 times sales, buyers are already paying for strong growth to continue.

Where Could Snowflake’s AI Push Fall Short?

The AI push could fall short on profit or on staying power, since faster growth does not show what Snowflake earns on AI work or how long new projects last. Management said on the call that it earns a lower contribution margin today on its fast-growing AI workloads. The company still reports a loss, though its operating margin of -17.0% in fiscal Q2 2027 is narrower than -29.7% a year earlier. Management says it is on track for a GAAP profit in fiscal Q4 2028, which is a target, not a result.

Regarding staying power, an analyst asked on the September 2 call whether the AI use reflects higher spending over each customer’s lifetime or projects pulled forward. In the same answer, management said it was not ready to share the exact lift in consumption it measures for AI adopters. It said the breadth and depth of customer use cases gives it confidence this is not just projects pulled forward.

If customers slow their take-up of Cortex Code and CoWork, it could cost Snowflake part of the faster growth that management credits to its newer products. If customers do not spend more across the core platform, the AI gains stay within two products. Either way, you would own a company that still loses money, priced far above the market on sales.

For now, customers are taking up Snowflake’s two AI products quickly, and management says the core data platform business is growing alongside them. Account figures back the take-up of the AI products, while the spread to the core platform relies on management’s own statements. Product revenue grew 37% in fiscal Q2 2027, and management expects 37% to 38% growth in fiscal Q3 2027. That growth rate is the number to watch when Snowflake reports, expected in December 2026.

How To Act On SNOW?

Now you know Snowflake better. Our purpose is to inform you so you can decide for yourself, and acting on one stock, in either direction, carries its own risk.

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