Snowflake Stock is Soaring: Is it Too Late to Buy This AI Stock?

Parkev Tatevosian, CFA•Sep 11, 2026

Summary

Parkev states that Snowflake's business performance is strong, highlighted by 37% product revenue growth and management raising full-year revenue guidance to over $6.07 billion. While the company has successfully navigated past market skepticism to become a key player in the AI expansion, Parkev notes a decline in the cash flow from operations to sales ratio from 30% to 23%. Parkev suggests this indicates that aggressive reinvestment in innovation is temporarily impacting profit margins, though Parkev remains optimistic about the company's target to reach GAAP profitability by the fourth quarter of fiscal 2028.

Parkev argues that the deployment of cash from the balance sheet, which decreased from $4.7 billion to $2.3 billion, is a productive use of capital to drive future growth. However, based on an updated discounted cash flow model, Parkev finds that the stock's intrinsic value is $212. Since the current market price is approximately $335, Parkev concludes that the stock does not offer a favorable margin of safety at this time.

SNOW: Parkev maintains a HOLD rating for Snowflake because the forward price-to-earnings ratio of 113 is roughly four times the S&P 500 average, demanding absolute excellence. Parkev points out that while the business is performing better than previously estimated, the current price of $335 is significantly higher than Parkev's fair value estimate of $212. Parkev suggests that the ideal buying opportunity occurred earlier in the year when the forward P/E was below 50, and advises waiting for a better entry point now.

Mentioned Stocks

SNOW

Sentiment: HOLDAction: RECOMMENDED

Reasoning: Parkev observes that Snowflake is growing rapidly at 37% and remains on track for GAAP profitability by fiscal year 2028. However, Parkev highlights that the valuation has surged to a forward P/E of 113, which Parkev considers too expensive. Parkev's discounted cash flow analysis yields a fair value of $212, which is well below the current market price of $335. Parkev argues that investors should wait for a better entry point, noting that the best time to buy was when the stock traded at a forward P/E below 50.

Loading chart...