Snowflake Inc (NYSE:SNOW) is expected to post strong third-quarter growth as enterprises increasingly tap its data platform to power artificial intelligence and Agentic AI applications.
Rosenblatt analyst Blair Abernethy maintained Snowflake with a Buy and raised the price target from $250 to $275.
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Abernethy expects Snowflake to deliver an in-line or better fiscal third-quarter when it reports results after the close on Dec. 3.
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The analyst slightly raised his product revenue growth estimate after cloud service provider performance in the September quarter, regional customer event feedback and cloud data migration momentum.
He now modelled 27% year-over-year organic product revenue growth in the third quarter, a moderation from 32% in the second quarter as the business scales but still backed by growing adoption of new products and accelerating AI-driven consumption.
Abernethy noted Snowflake holding a major medium-term growth opportunity as enterprises adopt AI and Agentic AI applications built directly on its data platform.
More than 4,000 customers used Snowflake's AI and machine learning technology weekly in the second quarter, and the company continues to expand embedded AI capabilities at a rapid pace.
Based on the improving outlook, Abernethy lifted his estimates for fiscal 2026 through fiscal 2028.
For the third quarter, the analyst expects product revenue of $1.143 billion, above guidance and consensus, with total revenue reaching $1.192 billion, up 27% year over year.
He forecasts an adjusted operating margin of 9%, matching guidance and EPS of 32 cents, slightly ahead of consensus.
Abernethy also projects net revenue retention above 124%, supported by customers increasing usage and renewing at higher value as they mature on the platform.
Remaining performance obligations grew roughly 33% year over year in the second quarter to $6.93 billion, driven by large enterprises signing longer-term deals that improve visibility into fiscal 2026.
The analyst pointed to Snowflake's recent acquisition of Datometry as a catalyst for faster migration of workloads from legacy data warehouses like Teradata.
The technology will be integrated into Snowflake's AI-driven migration tools, enabling transitions that are up to four times faster and as much as 90% cheaper.
He also highlighted Snowflake's new partnership with Palantir Technologies Inc (NASDAQ:PLTR), which allows customers to run bidirectional, zero-copy data flows and strengthens Snowflake's federal market positioning.
Abernethy continues to monitor the adoption of newer products such as Iceberg Tables, Native Apps, Snowpark Containers and Streamlit, which management believes can help accelerate growth in the second half.
The analyst is also watching early traction for Cortex AI and consumption trends among the largest customers in key verticals, including banking and media.
He remains confident that the secular shift of data workloads to the cloud will continue despite broader macro uncertainty and views Snowflake as strongly positioned to capture the next phase of AI-driven enterprise growth.
SNOW Price Action: Snowflake shares were up 0.52% at $252.54 at the time of publication on Monday.
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