Snowflake's Q3 Revenue Growth Slows Amid Profitability Concerns
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Should l Buy SNOW?
Source: NASDAQ.COM
- Revenue Growth Slowdown: Snowflake's Q3 revenue reached $1.21 billion, up 29% year-over-year, but the product revenue growth rate decelerated from 32% to 29%, indicating a weakening growth momentum that may impact investor confidence.
- Customer Base Expansion: The company added 688 new customers during the reporting period, with the number of customers generating over $1 million in product revenue increasing by 29% year-over-year, suggesting strong market demand despite the overall slowdown in revenue growth.
- Profitability Concerns: Although adjusted operating income was $131.3 million, representing 11% of revenue, the company reported a net loss exceeding $1 billion over the past nine months, worsening from a $963 million loss in the same period last year, raising investor concerns about future profitability.
- AI-Driven Growth Potential: Snowflake's enterprise AI agent, Snowflake Intelligence, achieved the fastest adoption rate in the company's history, indicating that despite the overall revenue growth slowdown, strong demand for AI features could provide momentum for future growth.
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Analyst Views on SNOW
Wall Street analysts forecast SNOW stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for SNOW is 285.29 USD with a low forecast of 237.00 USD and a high forecast of 325.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
34 Analyst Rating
32 Buy
2 Hold
0 Sell
Strong Buy
Current: 173.240
Low
237.00
Averages
285.29
High
325.00
Current: 173.240
Low
237.00
Averages
285.29
High
325.00
About SNOW
Snowflake Inc. is a data cloud and artificial intelligence company. Its platform is the technology that powers the AI Data Cloud, enabling customers to consolidate data into a single source of truth to drive meaningful insights, apply artificial intelligence (AI) to solve business problems, build data applications, and share data and data products. It provides its platform through a customer-centric, and consumption-based business model. Its cloud-native architecture consists of three independently scalable but logically integrated layers across compute, storage, and cloud services. The compute layer provides dedicated resources to enable users to simultaneously access common data sets for many use cases with minimal latency. The storage layer ingests massive amounts and varieties of structured, semi-structured, and unstructured data to create a unified data record. Its ClearQuery platform allows users to rapidly search, explore, and analyze their data using natural language queries.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Market Concerns Intensify: Fears regarding AI's threat to software companies have persisted from 2025, leading to significant declines in software stocks at the start of 2023, particularly as the top ten stocks in the S&P 500 have shown marked deterioration relative to the broader market, indicating a decline in investor confidence in the software sector.
- New Collaboration for Snowflake: Snowflake has announced a $200 million deal with OpenAI to integrate its advanced models directly into the Snowflake platform, a move that not only enhances its product competitiveness but also has the potential to drive future revenue growth.
- Strong Financial Performance: Despite the looming AI threat, Snowflake reported a 29% year-over-year increase in product revenue for Q3, with a healthy client retention rate of 125%, showcasing its resilience and ongoing appeal in the market.
- Analysts Optimistic About Future: Goldman Sachs analyst Gabriela Borges has assigned a 'Buy' rating to Snowflake with a price target of $286, suggesting approximately 49% upside potential, reflecting strong market confidence in its future growth prospects.
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- Customer Base Expansion: The company ended Q3 with 688 customers generating over $1 million in trailing-12-month product revenue, marking a 29% increase year-over-year, indicating strong market demand for Snowflake's offerings despite growth concerns.
- Strong Demand Signals: Snowflake's remaining performance obligations (RPO) reached $7.88 billion at the end of Q3, up 37% year-over-year, suggesting rapidly growing customer demand for its data cloud platform, although revenue recognition is based on usage rather than contracts.
- Profitability Concerns: Despite reporting an adjusted operating income of $131.3 million and a gross margin of 76%, Snowflake's net loss exceeded $1 billion over the trailing nine months, highlighting ongoing profitability challenges that could deter investors.
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Snowflake's Q3 Revenue Growth Slows Amid Profitability Concerns
- Revenue Growth Slowdown: Snowflake's Q3 revenue reached $1.21 billion, up 29% year-over-year, but the product revenue growth rate decelerated from 32% to 29%, indicating a weakening growth momentum that may impact investor confidence.
- Customer Base Expansion: The company added 688 new customers during the reporting period, with the number of customers generating over $1 million in product revenue increasing by 29% year-over-year, suggesting strong market demand despite the overall slowdown in revenue growth.
- Profitability Concerns: Although adjusted operating income was $131.3 million, representing 11% of revenue, the company reported a net loss exceeding $1 billion over the past nine months, worsening from a $963 million loss in the same period last year, raising investor concerns about future profitability.
- AI-Driven Growth Potential: Snowflake's enterprise AI agent, Snowflake Intelligence, achieved the fastest adoption rate in the company's history, indicating that despite the overall revenue growth slowdown, strong demand for AI features could provide momentum for future growth.
See More
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- Customer Base Expansion: As of Q3, Snowflake had 688 customers generating over $1 million in annual revenue, a 29% increase year-over-year, indicating strong market demand for high-value clients despite the growth slowdown.
- Strong Remaining Performance Obligations: Snowflake's remaining performance obligations totaled $7.88 billion at the end of Q3, up 37% year-over-year, suggesting robust customer demand for its data cloud platform, although revenue recognition is based on usage rather than contracts.
- Profitability Concerns: Despite reporting an adjusted operating income of $131.3 million and a gross margin of 76%, Snowflake faced a net loss exceeding $1 billion over the past nine months, highlighting ongoing profitability risks that may deter investors.
See More
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- Surge in Trading Volume: Trading volume reached 110.7 million shares, approximately 136% above the three-month average of 47 million shares, reflecting a notable increase in market attention towards the stock despite its decline.
- Strong Performance Support: The company reported a 70% revenue growth to $1.41 billion in Q4 and received upgrades to Buy from two analysts; however, market skepticism regarding its premium valuation compared to other AI software firms led to the stock's downturn.
- Contract Secures Revenue: Palantir secured a $1 billion contract with the UK Ministry of Defence, ensuring multi-year revenue visibility, yet investors are still assessing whether its commercial momentum and expanding margins can justify its high valuation.
See More
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- Market Concerns Intensify: Fears regarding AI's threat to software companies have persisted from 2025, leading to significant declines in software stocks at the start of 2023, particularly as the top ten stocks in the S&P 500 have shown marked deterioration relative to the broader market, indicating a decline in investor confidence in the software sector.
- New Collaboration for Snowflake: Snowflake has announced a $200 million deal with OpenAI to integrate its advanced models directly into the Snowflake platform, a move that not only enhances its product competitiveness but also has the potential to drive future revenue growth.
- Strong Financial Performance: Despite the looming AI threat, Snowflake reported a 29% year-over-year increase in product revenue for Q3, with a healthy client retention rate of 125%, showcasing its resilience and ongoing appeal in the market.
- Analysts Optimistic About Future: Goldman Sachs analyst Gabriela Borges has assigned a 'Buy' rating to Snowflake with a price target of $286, suggesting approximately 49% upside potential, reflecting strong market confidence in its future growth prospects.
See More
Snowflake Launches Cortex Code AI Coding Agent to Accelerate Data Projects
- AI Coding Agent Launch: Snowflake has unveiled Cortex Code, an AI coding agent designed specifically for the enterprise data stack, aimed at helping clients like Braze and LendingTree accelerate the transition of data and AI projects from concept to production, significantly enhancing development efficiency.
- Secure Development Environment: Cortex Code CLI provides secure coding assistance for data teams, enabling them to work more efficiently in local development environments while ensuring data governance and security controls are maintained, addressing market demands for high-quality solutions.
- New Feature Integrations: Snowflake has also introduced integrations with Vercel's v0 and Brave Search's agentic web search, enhancing the capabilities for developing AI applications, allowing users to securely build and deploy AI-driven data apps within the Snowflake platform, further promoting enterprise AI adoption.
- Positive Customer Feedback: Clients such as dentsu and WHOOP have reported that Cortex Code has helped them accelerate the shift from experimentation to production without disrupting workflows, enhancing team productivity and data-driven decision-making capabilities, showcasing the immense potential of AI in practical applications.
See More
Snowflake's Earnings Report Shows Slowing Growth
- Revenue Growth Slowdown: Snowflake reported product revenue of $1.16 billion in fiscal Q3 2026, reflecting a 29% year-over-year increase, but this deceleration from 32% in Q2 raises concerns about sustained growth momentum among investors.
- Customer Base Expansion: The company ended Q3 with 688 customers generating over $1 million in trailing-12-month product revenue, marking a 29% increase year-over-year, indicating strong market demand for Snowflake's offerings despite growth concerns.
- Strong Demand Signals: Snowflake's remaining performance obligations (RPO) reached $7.88 billion at the end of Q3, up 37% year-over-year, suggesting rapidly growing customer demand for its data cloud platform, although revenue recognition is based on usage rather than contracts.
- Profitability Concerns: Despite reporting an adjusted operating income of $131.3 million and a gross margin of 76%, Snowflake's net loss exceeded $1 billion over the trailing nine months, highlighting ongoing profitability challenges that could deter investors.
See More
Snowflake's Q3 Revenue Growth Slows Amid Profitability Concerns
- Revenue Growth Slowdown: Snowflake's Q3 revenue reached $1.21 billion, up 29% year-over-year, but the product revenue growth rate decelerated from 32% to 29%, indicating a weakening growth momentum that may impact investor confidence.
- Customer Base Expansion: The company added 688 new customers during the reporting period, with the number of customers generating over $1 million in product revenue increasing by 29% year-over-year, suggesting strong market demand despite the overall slowdown in revenue growth.
- Profitability Concerns: Although adjusted operating income was $131.3 million, representing 11% of revenue, the company reported a net loss exceeding $1 billion over the past nine months, worsening from a $963 million loss in the same period last year, raising investor concerns about future profitability.
- AI-Driven Growth Potential: Snowflake's enterprise AI agent, Snowflake Intelligence, achieved the fastest adoption rate in the company's history, indicating that despite the overall revenue growth slowdown, strong demand for AI features could provide momentum for future growth.
See More
Snowflake Reports Slowing Growth Amid AI Demand
- Revenue Growth Slowdown: Snowflake's product revenue for Q3 FY2026 reached $1.16 billion, reflecting a 29% year-over-year increase, but this marks a decline from the 32% growth seen in the previous quarter, potentially undermining investor confidence.
- Customer Base Expansion: As of Q3, Snowflake had 688 customers generating over $1 million in annual revenue, a 29% increase year-over-year, indicating strong market demand for high-value clients despite the growth slowdown.
- Strong Remaining Performance Obligations: Snowflake's remaining performance obligations totaled $7.88 billion at the end of Q3, up 37% year-over-year, suggesting robust customer demand for its data cloud platform, although revenue recognition is based on usage rather than contracts.
- Profitability Concerns: Despite reporting an adjusted operating income of $131.3 million and a gross margin of 76%, Snowflake faced a net loss exceeding $1 billion over the past nine months, highlighting ongoing profitability risks that may deter investors.
See More
Palantir Shares Plunge 11.72% Amid Valuation Concerns
- Significant Stock Drop: Palantir Technologies closed at $139.54 on Wednesday, down 11.62%, indicating that despite strong Q4 results, renewed investor concerns about valuation have pressured the stock price.
- Surge in Trading Volume: Trading volume reached 110.7 million shares, approximately 136% above the three-month average of 47 million shares, reflecting a notable increase in market attention towards the stock despite its decline.
- Strong Performance Support: The company reported a 70% revenue growth to $1.41 billion in Q4 and received upgrades to Buy from two analysts; however, market skepticism regarding its premium valuation compared to other AI software firms led to the stock's downturn.
- Contract Secures Revenue: Palantir secured a $1 billion contract with the UK Ministry of Defence, ensuring multi-year revenue visibility, yet investors are still assessing whether its commercial momentum and expanding margins can justify its high valuation.
See More
