Competition in the enterprise data and artificial intelligence market is heating up, with Databricks rapidly gaining scale and positioning itself as a formidable rival to Snowflake. However, analysts at Jefferies believe the growing demand for AI-powered data infrastructure is creating enough opportunity for both companies to thrive.
According to Jefferies, Databricks is on track to achieve an annualized revenue run rate exceeding $6.9 billion in the first half of fiscal 2027. This would represent approximately 65% year-over-year growth in its core business and nearly 80% growth when revenue from large language model (LLM) offerings is included. In comparison, Snowflake’s revenue run rate is estimated at around $5.5 billion, reflecting solid growth of 32% year over year.
The projections suggest Databricks could surpass Snowflake in overall scale for the first time. Despite this milestone, Snowflake continues to maintain a stronger profitability profile. Jefferies estimates the company generates free cash flow margins of roughly 23%, while Databricks remains close to breakeven as it continues to invest heavily in growth initiatives.
Importantly, analysts noted that Snowflake has demonstrated resilience in the face of increasing competition. Over the past two quarters, the company has accelerated growth, recording approximately four percentage points of product revenue acceleration in the first quarter of fiscal 2027. Product revenue growth reached 34% year over year, signaling sustained customer demand for its platform.
Artificial intelligence is also becoming an increasingly important growth driver for Snowflake. The company is investing in AI-powered offerings such as CoCo and Snowflake CoWork, which analysts believe could unlock new monetization opportunities while driving higher consumption across its core data platform.
Meanwhile, Databricks continues to strengthen its presence in data warehousing. Its SQL Warehouse product has surpassed a $1.5 billion annualized revenue run rate, highlighting growing enterprise adoption. Even so, Jefferies believes Snowflake still commands a significantly larger data warehousing business and has narrowed the competitive gap in key technical areas, particularly AI capabilities.
The report also highlighted Databricks’ Genie platform, which is designed to make enterprise data more accessible to business users. Through integrations with applications such as Microsoft Teams, Slack, and Google Drive, Genie enables employees to interact with company data using natural language, potentially accelerating AI adoption across organizations.
Snowflake shares closed at approximately $235 on Wednesday and are up around 7% year-to-date, reflecting continued investor confidence despite the increasingly competitive landscape.
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