The broader software sector has been under pressure heading into 2026, shaken by what Wall Street has dubbed the “SaaSpocalypse.” The fear is that autonomous AI agents could disrupt traditional subscription-based models and compress long-standing revenue streams. That anxiety has translated into real damage. The world’s largest software ETF by assets, the iShares Expanded Tech-Software Sector ETF (IGV), fell sharply as investors headed for the exits.
Among the names included on the slide was Snowflake (SNOW), the cloud data platform. But it soon saw a rebound as investors returned to long-lasting, deeply rooted business names. Now the focus is on the fundamentals. Snowflake will report its fiscal fourth quarter and full-year fiscal 2026 results on Wednesday, February 25, 2026. While management appears optimistic, Wall Street is modeling double-digit growth in both revenue and earnings for fiscal 2026.
Earnings season is more than a routine disclosure cycle. Quarterly reports offer a forward-looking signal, revealing not only what a company earned, but also where it might be headed next. For investors, this report could set the tone going forward. So keep that date circled.
Founded in 2012 and headquartered in Montana, Snowflake has become one of the most influential names in cloud data infrastructure, with a market capitalization of approximately $60.6 billion. The company operates its Data Cloud, a unified platform that enables organizations to securely store, manage, analyze and share data at scale. Enterprises use Snowflake to power real-time analytics, AI-powered applications, and business-to-business collaboration.
Its scope spans financial services, media, retail, healthcare, manufacturing, technology, telecommunications, travel and the public sector; essentially any industry where data is critical to decision making.
Additionally, strategically, Snowflake has leaned more toward artificial intelligence (AI). A $200 million deal with OpenAI, along with its partnership with Anthropic, positions the company to capture more AI-related workloads. And this could potentially take away revenue from traditional cloud infrastructure giants.
Despite its scale and strategic positioning, Snowflake’s share price performance has been far from impressive. Shares of the cloud computing company are down 8.66% over the past 52 weeks. Over the past six months, SNOW has declined by 11.18%, indicating persistent pressure. The short-term trend has been more pronounced, with a drop of 30.82% in the last three months alone. Even early 2026 has offered little relief, with shares down 19.73% year-to-date (YTD).
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In terms of valuation, SNOW stock is priced at 147.07 times forward adjusted earnings and 13.02 times sales, which is quite high. However, those multiples are below their five-year averages. Furthermore, after the “SaaSapocalypse” sell-off dragged the stock into oversold territory and triggered opportunistic buying.
Additionally, with analysts projecting strong revenue growth this year and next, and new corporate deals expected to further accelerate momentum, many growth investors could still see a justification for the premium.
Snowflake lowered its third-quarter numbers on December 3. Revenue was $1.21 billion, up 28.7% year-over-year. Product revenue did most of the heavy lifting, rising 29% year over year to $1.16 billion as more companies leaned into data infrastructure and AI workloads.
It reported a net loss of $293.9 million, or -$0.87 per share, down from last year’s numbers. Non-GAAP EPS came in at $0.35, up 75% from the year-ago quarter and comfortably ahead of Wall Street projections. It also marked the sixth consecutive increase in profits.
Then there is the go signal. Remaining performance obligations increased 37% year over year to $7.88 billion, indicating that long-term contracts are piling up. Snowflake added a record 615 new customers in the quarter, while net revenue retention remained strong at 125%. Existing customers not only stay, they spend more.
But AI makes the picture more interesting. More than 7,300 customers now use Snowflake’s AI capabilities weekly, and Snowflake Intelligence became the fastest-adopting product in the company’s history, reaching 1,200 customers. AI-related offerings hit $100 million revenue rate a quarter ahead of schedule; Fewer pilots, more production deployments. Furthermore, the associations widened the moat. Agreements with SAP (SAP), Google Cloud (GOOG), and Anthropic expanded the choice of models and integration of enterprise-grade AI.
While the company is set to release its fiscal 2026 figures next week, management raised full-year product revenue guidance to around $4.446 billion, indicating 28% year-over-year growth. Additionally, management anticipates a gross product margin of 75%, an operating margin of 9%, and a free cash flow margin of 25%.
Analysts following Snowflake predict a loss of $2.32 per share, a gain of 33.7% in fiscal 2026, followed by a loss of -5.6% of -$2.45 in fiscal 2027.
The atmosphere around software may be heavy, but the tone in some corners of Wall Street is more measured. Analyst Gregg Moskowitz of Mizuho lowered SNOW’s price target to $220 from $285, reflecting the strong multiple squeeze that has spread across the enterprise software space. Even so, it kept the “Outperforming” rating intact.
Mizuho cut targets across the group, acknowledging that fears of AI disruption have driven sentiment to extreme lows. However, beneath the surface, its recent quarterly software checks returned solid results. In that gap between fear and fundamentals, the brokerage firm sees selectively attractive opportunities for investors who are patient enough to wait.
Snowflake has an overall consensus rating of “Moderate Buy.” Of the 45 analysts covering the stock, 36 recommend a “Strong Buy,” three recommend a “Moderate Buy,” four suggest a “Hold,” and the remaining two give a “Strong Sell” rating.
The average price target of $277.43 suggests a 57.6% upside potential from current price levels. The $465 Street high price target for Snowflake implies the stock could rise as much as 164%.
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On the date of publication, Sristi Suman Jayaswal had no positions (either directly or indirectly) in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. This article was originally published on Barchart.com
