To The Moon

$Snowflake(SNOW)$ heading into its upcoming fiscal Q3 2026 earnings (reporting Dec 3, 2025), in this article we will look at what to watch, and whether there might be a short-term trading opportunity.

And why we can look at Snowflake (SNOW) in a top-down approach, as we will look why in this article.

What to Watch in Q3 Earnings

These are the key metrics and signals that investors — and short-term traders — will likely zero in on for Snowflake’s Q3 2026 results.

• Revenue (Product + Services) & Growth Rate

Consensus estimates for Q3 are ≈ US$1.18 billion revenue.

For context — Snowflake’s Q2 FY2026 product revenue was ~$1.09 billion, a ~32% year-over-year increase.

Given product revenue is core to its business and growth story, investors will watch for whether Snowflake meets or beats estimates — and whether growth remains strong compared to prior quarters.

• Earnings per Share (EPS) / Profitability Metrics

The consensus EPS forecast is about US$0.31 per share, representing a substantial year-over-year growth.

Non-GAAP metrics such as gross profit, gross margin, and any improvement in operating margins will be scrutinized (especially as Snowflake continues investing in AI, infrastructure, and R&D). Analysts are watching whether the company can keep scaling revenue without eroding margins.

• Customer Metrics and Account Expansion

Forecasts suggest total customers could rise to ~ 12,483, up from prior quarters.

Also under watch: the number of customers with trailing 12-month product revenue > US$1 million — estimated to rise (~686 vs ~542 year-ago).

These numbers offer insight into how well Snowflake is scaling, especially among larger enterprise accounts — a key for long-term monetization and retention.

• Remaining Performance Obligations (RPO) / Forward Bookings / Backlog

Analysts estimate RPO could be around US$7.46 billion, up from prior quarters.

RPO is a forward-looking metric — strong growth here signals good booked but not yet recognized revenue, implying future quarters may also show strength.

• Guidance & Commentary (AI Demand, Large Deals, Cost Control)

Given Snowflake’s push into AI-driven data services (via tools like Snowpark, Cortex, etc.), commentary regarding demand for AI workloads, enterprise adoption, and large deals will matter a lot. Some analysts expect upside because of rising AI workloads.

Also watch for any revisions to forward guidance (product-revenue outlook, margin assumptions), as this often drives stock reaction more than the quarter alone.

Q2 2026 Earnings — What Snowflake Delivered

Key Results & Metrics

For Q2 (ended July 31, 2025), Snowflake reported product revenue of US$ 1.09 billion, up 32% year-over-year (YoY).

Total GAAP revenue came in at about US$ 1.144 billion, up roughly 31.8% YoY.

On a non-GAAP basis, earnings per share (EPS) were US$ 0.35, beating consensus estimates (~US$ 0.27).

Non-GAAP operating margin rose to 11%, reflecting improved efficiency while still growing.

Customer metrics remain healthy: the “net revenue retention rate” stood at 125%, indicating existing customers are expanding their usage.

Forward-looking metric: “Remaining Performance Obligations” (RPO) — a proxy for booked but not yet recognized revenue — was US$ 6.9 billion, up ~33% YoY.

Business Trends & Strategic Signals

The jump in product revenue and strong customer retention suggest the core business remains robust, with customers increasing usage.

Snowflake management emphasized their expanding “AI Data Cloud” vision: customers are increasingly using AI features and new workloads — signaling adoption of more advanced use cases beyond basic data warehousing.

Despite investments (e.g. R&D, platform development), Snowflake managed to improve non-GAAP operating margins — showing discipline in scaling even while investing.

Overall, the quarter was a strong execution beat, with high growth and improving profitability metrics.

What Management’s Guidance & Forward Outlook Tell Us — And the Lessons Learned

From Q2, Snowflake not only reported strong results — management also raised expectations going forward.

Key forward-looking points:

They increased full-year 2026 revenue guidance (product revenue) — signaling confidence in continued demand.

Management reiterated focus on investing in product and AI capabilities, and on scaling enterprise adoption (especially among large customers), suggesting they see the next phase as deeper monetization and bigger deals rather than just adding customers.

The emphasis on operational discipline + margin expansion (non-GAAP operating margin, and controlling cost growth even while investing) suggests Snowflake is shifting more toward “growth with efficiency,” rather than pure growth-at-all-costs.

Lessons / Key Takeaways

Strong core demand + enterprise stickiness: The high net-revenue retention shows Snowflake isn’t just signing new customers, but existing customers are spending more — a healthy sign for long-term recurring revenue.

AI + data cloud positioning is paying off: The growing use of AI/data platform features suggests Snowflake may benefit from the broader enterprise shift to AI/data — not just analytics but AI workloads, more enterprise-wide use cases.

Scalable growth with improving profitability: Snowflake is showing it's possible to grow fast while improving margin — a transition many high-growth software companies struggle with.

Forward visibility is strong (RPO + guidance raise): With $6.9B in RPO and an upward revision to guidance, there is reasonable visibility into future revenue, not just speculation.

But margin expectations and execution remain critical: As Snowflake invests in AI, R&D, sales, it must avoid margin compression. The efficiency discipline works for now — maintaining that will be key.

What to Watch / Hidden Risks Despite the Good Quarter

Even though non-GAAP profit and margins improved, the company still shows GAAP net losses — reflecting continued investments. For some investors, that may limit how appealing Snowflake is until it shows sustained profitability.

As Snowflake shifts to larger enterprise deals and more “AI/data-cloud” workloads, execution risk rises: winning big customers, successfully delivering enterprise-grade AI/data services, and managing costs.

The forward guidance — while bullish — depends heavily on continued usage ramp, enterprise adoption, and macroeconomic stability; any slowdown (e.g. IT budget freezes) could dent momentum.

What This Means for Investors & What to Learn

For investors who focus on long-term structural growth: Q2 reinforces Snowflake’s position as a leading cloud data-AI platform with expanding enterprise adoption. The mix of growth, improving margin, and AI positioning makes the long-term story attractive.

For those focused on valuation and margin discipline: this quarter shows that fast-growing software companies can improve margin while scaling — a model worth watching.

For traders/short-term: the strong beat + raised guidance could act as a catalyst — but because execution risk remains (investment costs, mixed GAAP profitability), the stock could remain volatile — which might suit a trade, but carries risk.

Snowflake (SNOW) Price Target

Based on 45 analysts from Tiger Brokers app offering 12 month price targets for Snowflake in the last 3 months. The average price target is $274.37 with a high forecast of $500.00 and a low forecast of $170.00. The average price target represents a 8.88% change from the last price of $252.00.

Does This Create a Short-Term Trading Opportunity?

I would say possible but with risk. Here is a breakdown:

What could drive a positive move

Snowflake has a history of beating expectations: over its last several quarters, EPS and revenue beats have occurred frequently.

Strong RPO and customer growth could offer confidence in future quarters, giving the stock a “runway” — especially if AI-driven demand is highlighted.

According to some analyses, the option markets are pricing in a potential post-earnings move of ~ ±11% (i.e. a sizable swing) — which suggests volatility and opportunity for traders.

Risks / What could disappoint

If growth slows — e.g., revenue below ~US$1.18 bn or customer growth disappoints — the valuation may look stretched given Snowflake’s historically aggressive multiples.

Profitability metrics: heavy investment in AI infrastructure or sales / R&D could weigh on margins or lead to a weaker-than-expected EPS.

Forward guidance matters: if management warns of softer demand or macro-related headwinds (e.g. enterprise IT budget cuts), the share price could fall even if this quarter “beats.”

Trading / Investment Scenarios

Bullish short-term trade: Enter before earnings (e.g., long stock or call options). If Snowflake beats and raises forward tone — could see a strong pop (perhaps in double-digit % range) given volatility expectations.

Cautious / wait-and-see: Wait for the report + guidance — then decide whether to add or avoid, depending on how confident you are in sustained growth, margins, and demand trajectory.

Longer-term investor view: If you believe AI/cloud adoption continues to accelerate and Snowflake can convert its backlog (RPO) into revenue while controlling costs, it could remain a compelling long-term growth name — but valuation remains premium, so expect swings.

Technical Analysis - Exponential Moving Average (EMA)

As we have seen some of the AI software SaaS reporting their earnings, we can see that demand for AI SaaS is still going strong, and we can see that SNOW is on its way to recovery to the upside, and there might be some increased investor sentiment, as we might see some market recovery this week.

So if SNOW could show strong retention and increasing consumption among existing customers, this should give investors confidence that this stock might be a good buy, I normally assess stocks based on the top-down approach, looking at the broad market condition, and sector.

Summary

Wall Street consensus anticipates revenue of about US $1.18 billion and EPS around US $0.31 — roughly +25-30% year-over-year growth in revenue.

Some firms see modest sequential growth compared with Q2, as growth begins to normalize after a strong prior quarter.

Key growth drivers expected: rising adoption of Snowflake’s AI-enabled data cloud tools (e.g. AI/ML workloads, “agentic AI”), increasing usage among existing enterprise customers, and continued win-rate in cloud migrations.

What to Watch in the Results

Product revenue growth rate — whether Snowflake can sustain a high growth rate (though likely lower than Q2) as it scales.

Net revenue retention & usage expansion — strong retention and increasing consumption among existing customers signal healthy demand and monetization. Analysts expect retention to remain elevated (≈ 125%).

Profitability / margins — non-GAAP operating margin is expected around ~9%, per management guidance.

Forward outlook / commentary — management’s comments on AI demand, large-deal activity, and guidance for upcoming quarters will likely drive market reaction more than raw numbers.

If Snowflake delivers a beat (revenue and EPS above consensus), + strong commentary — stock could get a significant boost as optimism around its AI-data cloud positioning and enterprise demand strengthens. On the other hand, any softness (especially in growth rate slowdown, weaker margin, or cautious guidance) could raise concerns about scalability, making the stock vulnerable to downside.

As we can see from $MongoDB Inc.(MDB)$ earnings release, the stock surge after MDB report earnings beat and we can see that demand for AI-data related technology is still growing, and we should be able to see similar trend from SNOW AI-data cloud.

Appreciate if you could share your thoughts in the comment section whether you think SNOW could ride on strong retention and increasing consumption among existing customers to show that its growth and demand are in healthy zone.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.