Snowflake emerges as a once‑in‑a‑decade buying opportunity in AI

Snowflake (NYSE: SNOW) has positioned itself as a leading AI‑enabled cloud data platform, and a recent pullback in its share price offers investors a rare entry point into a high‑growth segment of the AI software market [1]. The company’s latest earnings show accelerating customer adoption, record‑size deals and a substantial boost to its backlog, all while trading at a valuation far below peers such as Palantir.

Key takeaways

• Snowflake’s AI platform lets customers rent GPUs and use large language models without buying hardware [1].
• Customer count grew 21% YoY in Q4 2026, and the firm signed its largest contract ever—over $400 million in total value [1].
• Remaining performance obligations rose 42% YoY to $9.8 billion, outpacing product‑revenue growth of 30% [1].
• The stock fell about one‑third in 2026, bringing the price‑to‑sales multiple down to roughly 10×, versus Palantir’s 82× [1].
• Analysts expect Snowflake’s earnings per share to keep rising, with a 50% YoY increase to $1.25 in fiscal 2026 [1].

AI‑centric growth fuels Snowflake’s momentum

Snowflake’s evolution from a pure data‑warehouse provider to an AI‑focused cloud platform is central to its recent performance. The company’s Cortex AI platform offers a fully managed environment where customers can access GPU resources and integrate popular large language models to build, customize, and scale AI applications [1]. This end‑to‑end service eliminates the need for costly on‑premise hardware, accelerating time‑to‑value for enterprises.

The impact is evident in the company’s customer metrics. In the fourth quarter of fiscal 2026, ending Jan. 31, 2026, Snowflake’s customer base expanded by 21% year over year, surpassing the 19% growth recorded in the same quarter a year earlier [1]. Management highlighted that the quarter also featured seven contracts exceeding $100 million each, up from just two in the prior year, and the largest deal ever—valued at more than $400 million—was signed during this period [1]. These wins boosted the firm’s remaining performance obligations (RPO) to $9.8 billion, a 42% increase from the previous year, indicating a growing pipeline of future revenue [1].

Valuation gap and long‑term upside

Despite the strong operational backdrop, Snowflake’s share price has declined roughly 33% in 2026, pulling its price‑to‑sales ratio to about 10×—a stark contrast to Palantir’s 82× multiple [1]. While Palantir’s revenue is growing faster, Snowflake’s growth remains robust, and the company’s ability to secure larger contracts suggests further acceleration is possible.

The broader AI‑enabled analytics market is projected to expand from $28 billion in 2024 to $220 billion by 2035, providing a sizable addressable opportunity for Snowflake’s platform [1]. Combined with its cross‑cloud capabilities and the ability to serve customers without hardware investment, the firm is well‑positioned to capture a meaningful share of this expanding market.