Snowflake Inc "Pass-Through Revs Relative to Databricks" (Buy) Keirstead

Research evidence excerpt

Snowflake Inc "Pass-Through Revs Relative to Databricks" (Buy) Keirstead

Global Research

21 June 2026ab

Snowflake Inc Equities

United StatesPass-Through Revs Relative to Databricks

Software

12-month rating Buy *

Summary

We attended the Databricks Investor Briefing in SF last week, where Databricks revealed 12m price target US$370.00

that it is increasingly acting as an access point/reseller of AI models and compute,

passing this through revs and thereby materially accelerating revs growth to ~80%.

Price (18 Jun 2026) US$232.29

Snowflake confirmed with us late last week that pass-through AI revs were immaterial

for them, a disclosure that we view as a net positive. We remain Buy-rated. RIC: SNOW.N BBG: SNOW US

Trading data and key metrics

Databricks as an “AI Gateway”

52-wk range US$280.16-121.11

Databricks disclosed that it is increasingly acting as an aggregation point or AI gateway

Market cap. US$87.1b

for customers to acquire AI models and hyperscaler compute via their Databricks

Shares o/s 375m (COM)

“universal credits”. This revs source has spiked of late, lifting total 1H revs growth to

Free float 87%

80%, a full 15-point boost relative to “core” revs growth of 65%, still outstanding, an

acceleration from +55% in FY26 and in our view supporting the “long data” trade. Avg. daily volume ('000) 1,610

Databricks argued that while these pass-through revs carry “very low” GMs, their role as Avg. daily value (m) US$291.1

a gateway to AI models and compute has strategic value, creating an upsell/add-on Common s/h equity (01/27E) US$2.46b

opportunity. We recently wrote a report (see here, called the “Hyperscaler Bull Case”) on P/BV (01/27E) 32.5x

how the hyperscalers are playing the same role and are also seeing a material revs lift, Net debt to EBITDA (01/27E) NM