Snowflake Inc faces pressure from Databricks' rapid growth and broader product push, though the broader cloud data platform market still supports both companies, according to BNP Paribas analyst Stefan Slowinski. The analyst highlighted that Snowflake's valuation discount and superior cash flow profile present relative attractiveness compared to its privately held competitor.

Databricks Expands Market Reach

Databricks is expanding beyond its traditional data engineering roots into databases, agentic AI, and applications. The company expects to exit the first half of fiscal 2027 at about $6.9 billion in annual recurring revenue, representing more than 80% year-over-year growth. Its core business grew 65% year over year in the first half of fiscal 2027, accelerating for the past 15 months. Additionally, Databricks SQL reached $1.5 billion in annual recurring revenue, growing more than 100% year-over-year.

Valuation and Growth Comparison

Slowinski noted that Databricks' growth and continued success in Snowflake's core SQL market could weigh on Snowflake sentiment. Snowflake's growth recently accelerated to about 34%, with annual recurring revenue of about $5.8 billion based on fiscal second-quarter estimates annualized. Snowflake trades at about 14 times annual recurring revenue, compared with about 19 to 25 times for Databricks. Databricks' latest public funding round valued the company at $134 billion, with a potential new valuation reportedly placing it between $165 billion and $175 billion, compared with Snowflake's roughly $80 billion market value.

Profitability and Cash Flow Advantages

Snowflake's stronger cash generation remains an advantage, Slowinski said. He highlighted Snowflake's 23% free cash flow margin target for this year, compared with Databricks' break-even free cash flow target as it prioritizes investment. BNP Paribas has a $282 forecast price on Snowflake, implying 18% upside from the June 16 price of $238.30. The analyst cited Snowflake's valuation discount, advanced free cash flow profile, and expected move to positive GAAP earnings as key factors making the stock relatively attractive.

Technical and ETF Exposure

Snowflake is trading 6.8% above its 20-day SMA ($222.96) and 15.7% above its 200-day SMA ($205.73), maintaining an intermediate uptrend. The stock is also stretched well above the 50-day and 100-day SMAs, up 34.9% and 35.8% respectively. Momentum indicators show the MACD below its signal line with a negative histogram, suggesting upside pressure is cooling. Snowflake holds significant weight in several ETFs, including the Vanguard Extended Market ETF (0.72%), Global X Cloud Computing ETF (4.06%), and Dana Unconstrained Equity ETF (6.87%).

Unlimitail has selected Snowflake to power its upcoming Global Retail Media Data Hub, utilizing Snowflake Data Clean Rooms to enable privacy-preserving retail media across Europe and Latin America. The partnership aims to address fragmentation in the digital advertising sector by allowing retailers to activate first-party data at scale and collaborate securely without data leaving their environments. Unlimitail's network currently spans 120 retail sites, reaching 250 million shoppers and generating more than 3 billion page views per month with more than 35 active retail partners.

The integration of Snowflake Data Clean Rooms allows retailers, brands, and agencies to analyze shared audiences and measure campaign outcomes against real purchase data. This capability ensures that campaigns are measured by actual purchases rather than just clicks or impressions. Role-based controls and Snowflake's zero-copy architecture ensure that each retailer retains full control of their data while maintaining privacy measures.

Retail Media Network Scale

Unlimitail's existing operations include managing Carrefour's first-party data in real-world conditions, both onsite and offsite. The company has extended its model to retailers such as MediaMarkt Saturn, MyOrigines, ID Kids, and Hygie 31. The move to Snowflake removes the barrier of moving data into a centralized system, which few retailers accept.

Strategic Implementation

Unlimitail plans to launch its Global Retail Media Data Hub on Snowflake later this year. This platform will serve as the single connection point for retailers, brands, and agencies across Europe and LATAM. The collaboration enables multiple parties to contribute, analyze, and activate data in a single, controlled environment without exposing raw data to others.

"Retail media is only as powerful as the trust and data behind it, and that trust has to be earned, not assumed," said Alexis Marcombe, Chief Executive Officer, Unlimitail. "By building on Snowflake, we can give every retailer in our network full control of their first-party data while also giving brands the closed-loop proof they've been asking for."

Snowflake's Industry Principal for Retail & Consumer Goods, Simon Contreras, emphasized that the solution allows brands to measure ROI all the way to the receipt. "Snowflake makes it possible to do that at scale, across markets and retail partners, without any retailer giving up control of their data," Contreras said.