Snowflake (SNOW) posed strong product revenue growth in fiscal Q2 due to “stable demand and improving large customer consumption,” Oppenheimer said Wednesday in a report.
Investor concerns about competition and Snowflake’s ability to execute in artificial intelligence are likely to persist with revenue upside smaller than the previous quarter, Oppenheimer said.
Increased compute revenue from Iceberg adoption, growing traction for products such as Cortex and Snowpark, improving execution and closing rates and leadership in serving analytical workloads are expected to contribute to an improved growth outlook in fiscal 2026, the report said.
Snowflake faces challenges from declining net revenue retention and margin pressures from graphics processing units and AI investments, while potential headwinds from the availability of Iceberg Tables affect product revenue growth, the report said.
Oppenheimer reiterated its outperform rating on Snowflake’s stock and kept the price target at $180.
On Wednesday, the company projected fiscal Q3 revenue of $850 million to $855 million. Analysts polled by Capital IQ expect $898.6 million.
Shares of Snowflake fell 13% in recent trading Thursday.