Is Snowflake Stock A Buy Today?
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Snowflake (SNOW) stock trades at 19.0 times sales, compared with 3.2 for the S&P 500, even though the company still runs at an operating loss. Buyers are betting that its new AI tools, Cortex Code and CoWork, will keep pulling workloads onto the platform, and that losses close as sales expand. Management said in September that growth was accelerating. So how much of Snowflake’s speed-up really comes from those AI tools?
About Half Of Snowflake’s Speed-Up Comes From AI Tools
During a September 2, 2026 call, management said Cortex Code and CoWork contributed about half of the acceleration, while faster migrations and other products accounted for the rest. That speed-up is visible in the reported figures, as revenue growth climbed in each of the last three quarters, rising from 28.7% in fiscal Q3 2026 to 35.1% in fiscal Q2 2027.
Adoption of the new software is spreading quickly. Management said Cortex Code alone added more than 2,000 net new accounts in fiscal Q2 2027, bringing its total to over 9,100, while CoWork reached 5,800 accounts. Snowflake’s overall sales growth also remains well above the broader market. The company posted average annual revenue growth of 30.5% over the last three twelve-month periods, compared with 6.1% for the S&P 500.
Management raised its fiscal 2027 forecast for product revenue growth to 36%, citing strength in both the core data platform and the AI business. The stock rose 16.6% the next day. So far, the growth buyers are paying for is showing up in the results.
Is Snowflake Getting Closer To A Profit?
The reported figures indicate that it is. Snowflake’s operating loss came to 17.0% of revenue in fiscal Q2 2027, narrowing from 29.7% a year earlier. The operating loss narrowed in every quarter in between, and management said the company remains on track for GAAP profitability in fiscal Q4 2028.
That target is still more than a year out. Over the last twelve months, Snowflake recorded an operating loss equal to 22.8% of its revenue, while the S&P 500 earned an operating margin of 18.7%. The business does bring in cash, however, with operations generating $1.25 billion over those same twelve months.
The catch is that the AI work behind the growth is less profitable. Management expects a 74% product gross margin for fiscal 2027 on its own adjusted measure, saying that this outlook includes more revenue from fast-growing AI workloads. The contribution margin on those workloads is lower today. For now, Snowflake keeps less of each dollar of AI sales than of a dollar from its older business.
What Investors Pay For Snowflake’s Growth
Snowflake has no earnings to price yet. With a loss over the last twelve months, its price-to-earnings ratio is not meaningful. Buyers are instead valuing the company on its sales and on the profit management expects to reach.
Shareholders have also experienced deep drops when broader markets turn. Snowflake stock fell further than the S&P 500 in each of five market shocks between 2022 and 2025. The deepest decline occurred during the 2022 inflation shock, when the stock fell 66%, compared with a 24% drop for the index. The shares are already down 13.0% over the month to November 3, 2026, while the S&P 500 lost 2.6%.
Snowflake’s growth is accelerating, and management credits its new AI tools with about half of that speed-up. The operating loss has narrowed each quarter, even though the AI work behind that growth is less profitable today. Snowflake is expected to report fiscal Q3 2027 results in December 2026. The reported operating margin is the number to watch, alongside how much of the growth management again credits to Cortex Code and CoWork. If the loss keeps narrowing, buyers paying 19.0 times sales get a profit path behind that price. If it stalls, they are paying for growth alone.
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