Snowflake Inc (NYSE:SNOW) faces pressure from Databricks’ rapid growth and broader product push. However, BNP Paribas analyst Stefan Slowinski said the broader cloud data platform market still supports both companies.
• Snowflake stock is trading near recent highs. What’s next for SNOW stock?
Slowinski Says Data Platform Demand Is Accelerating
Slowinski said Databricks’ Investor Briefing showed accelerating demand for cloud data platforms as AI increases the need for better business data context.
He said Databricks, which is privately held, is expanding beyond its traditional data engineering roots into databases, agentic AI, and applications.
Databricks said it expects to exit the first half of fiscal 2027 at about $6.9 billion in annual recurring revenue, with more than 80% year-over-year growth.
Its core business grew 65% year over year in the first half of fiscal 2027 and has accelerated for the past 15 months.
Databricks SQL also reached $1.5 billion in annual recurring revenue, growing more than 100% year-over-year.
Databricks Growth Could Weigh On Snowflake
Slowinski said Databricks’ growth and continued success in Snowflake’s core SQL market could keep weighing on Snowflake sentiment.
He noted that Snowflake’s growth recently accelerated to about 34%, while its annual recurring revenue is about $5.8 billion based on fiscal second-quarter estimates annualized.
Slowinski said Snowflake now trades at about 14 times annual recurring revenue, compared with about 19 to 25 times for Databricks.
Databricks’ latest public funding round valued the company at $134 billion, with a potential new valuation round reportedly placing it at $165 billion to $175 billion, compared with Snowflake’s roughly $80 billion market value.
BNP Sees Snowflake’s Profitability As A Strength
Slowinski said Snowflake’s stronger cash generation remains an advantage.
He highlighted Snowflake’s 23% free cash flow margin target for this year, compared with Databricks’ break-even free cash flow target, as it prioritizes investment.
BNP Paribas lists a $282 forecast price on Snowflake, implying 18% upside from the June 16 price of $238.30.
Slowinski said Snowflake’s valuation discount, more advanced free cash flow profile, and expected move to positive GAAP earnings make the stock relatively attractive.
Snowflake’s Technical Analysis
The bigger-picture trend remains constructive: Snowflake is trading 6.8% above its 20-day SMA ($222.96) and 15.7% above its 200-day SMA ($205.73), keeping the intermediate uptrend intact. It’s also stretched well above the 50-day and 100-day SMAs (up 34.9% and 35.8%, respectively), which can invite short-term mean reversion even without a full trend break.
Momentum is the main watch item right now: MACD is below its signal line, and the histogram is negative, which points to upside pressure cooling off from the prior upswing. In plain terms, when MACD sits below its signal line, it often means buyers are losing control unless the price can re-accelerate.
Snowflake’s Top ETF Exposure
- Vanguard Extended Market ETF (NYSE:VXF): 0.72% Weight
- Global X Cloud Computing ETF (NASDAQ:CLOU): 4.06% Weight
- Dana Unconstrained Equity ETF (NYSE:DUNK): 6.87% Weight
Significance: Because Snowflake carries significant weight in these funds, any significant inflows or outflows for these ETFs will likely trigger automatic buying or selling of the stock.
SNOW Price Action
SNOW Stock Price Activity: Snowflake shares were down 0.17% at $237.92 at the time of publication on Wednesday, according to Benzinga Pro data.
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