Snowflake and MongoDB are likely to beat expectations and raise guidance in 2Q27, but further upside requires execution beyond a routine beat

Overview

Ahead of Snowflake's and MongoDB's 2Q27 earnings, the report compares the companies' near-term earnings upside, potential FY27 guidance increases, AI-related momentum, profitability differences, and valuations. Bernstein expects both companies to deliver healthy beats and raise guidance, but their valuations have already recovered substantially. Therefore, greater share-price upside requires an additional positive surprise from MongoDB's Atlas growth or Snowflake's AI progress; over the long term, it continues to prefer MongoDB.

Core views

The overall assessment ahead of earnings is that both companies are positioned to deliver healthy beats and raise guidance. MongoDB and Snowflake will report 2Q27 earnings on September 1 and September 2, respectively. Strong IaaS/PaaS consumption demand has supported both companies' performance for approximately five consecutive quarters, and Bernstein believes enterprise efforts to prepare data assets for AI adoption continue to drive this demand. However, the market already widely recognizes this trend. Both companies' valuations have recovered significantly from their April 2026 lows and are at the high end of their two-year ranges; on a growth-adjusted basis, their valuations are broadly comparable. Consequently, a routine beat and guidance increase may be sufficient to sustain valuations but may not drive meaningful upside. For MongoDB, the report forecasts approximately 27% revenue growth in 2Q27, above company guidance of approximately 24% and market consensus of 25%. The forecast is based on approximately 28% growth in Atlas Cloud and approximately 22% growth in Other Subscription, while company guidance implies growth of approximately 26% and 20%, respectively. Atlas represents approximately 72% of total revenue, and its 2Q27 growth is expected to decelerate from 29% in the prior quarter to approximately 28%, mainly due to more difficult year-over-year comparisons. If growth remains at or above 29%, it would exceed the report's current model and could materially raise full-year expectations. The report presents two scenarios: if Atlas grows 27% to 28%, MongoDB can still deliver a healthy beat and raise due to conservative guidance; if growth remains at or above 29%, it could become a catalyst for meaningful share-price upside. MongoDB's FY27 guidance is still considered conservative. The company initially guided to approximately 17% FY27 revenue growth at the end of 4Q26, below the 23% recorded in FY26, causing its share price to decline approximately 25%. After 1Q27, the company raised its full-year revenue growth guidance to approximately 19.3%, after which its share price and valuation both recovered approximately 30% over the following three months. Bernstein expects actual FY27 revenue growth to reach at least 23%, compared with current guidance and consensus of approximately 20%. Full-year Atlas growth guidance is 25%, implying growth of only approximately 23% in 2H27, well below the approximately 29% growth over the past four quarters and approximately 26% guidance for 2Q27. Other Subscription accounts for approximately 28% of revenue, and full-year guidance also implies an approximately 8% decline in that business during 2H27. However, it has grown approximately 7% over the past eight quarters, and approximately 75% of term-license contract value is recognized as recurring maintenance revenue. The report therefore views such a steep decline as unlikely. The company also did not incorporate the full magnitude of its 1Q27 revenue beat into full-year guidance, leaving further room for an increase. MongoDB's AI opportunity is more long term. Its database primarily supports back-end operations and, although valuable to AI over the long term, it is not the primary focus of current AI investment. The company is focused on its core database rather than competing comprehensively with hyperscale cloud providers, AI laboratories, and other vendors on AI platform capabilities. This limits the magnitude of near-term incremental AI revenue but also reduces potential partnership conflicts, massive investment requirements, and the risk that the relevant capabilities will ultimately be controlled by large platforms. Bernstein remains positive over the long term on MongoDB's large and rapidly growing market and believes database usage and revenue should benefit as AI increasingly uses its data. For Snowflake, the near-term view rests on three factors: improving business metrics, strong cloud consumption demand, and gradual progress in AI products. Net revenue retention, or NRR, began stabilizing in 2Q25 after declining for years and has improved over the past four to five quarters. Because subscription revenue growth is highly correlated with NRR, this change has begun to flow through to revenue growth. The current portion of remaining performance obligations, or CRPO, is also a leading indicator of near-term revenue and has remained strong over the past five quarters, with signs of acceleration. The report also observes that CRPO growth exceeds subscription revenue growth, which in turn exceeds NRR, and believes this reflects increases in new customers and new workloads. Normalizing year-over-year consumption demand, the roll-off of high post-pandemic comparisons, product innovation and stronger sales execution, progress in new AI projects, weaker-than-expected headwinds from Iceberg and other factors, a temporary stabilization in competitive pressure, and cloud migrations undertaken to address AI demand collectively support improving business trends. Accordingly, Bernstein forecasts approximately 33% growth in Snowflake's 2Q27 product revenue, above company guidance of 30% and market consensus of 31%. Its forecast table shows 2Q27 subscription revenue of 1,453, above consensus of 1,426 by approximately 2%; for 3Q27, it forecasts 1,560, above 1,513 by approximately 3%. The corresponding growth rates are expected to be 33% and 35%, respectively, versus consensus of 31% for both periods, representing gaps of approximately 249 basis points and 405 basis points. FY27 subscription revenue is forecast at 5,984, approximately 2% above consensus of 5,863, with growth of 34% versus consensus of 31%. FY28 revenue is forecast at 7,649, approximately 3% above 7,405, with growth of 28% versus consensus of 26%. At the end of 4Q26, Snowflake initially guided to approximately 27% FY27 subscription revenue growth, below the 29% recorded in FY26; Bernstein expected it could deliver approximately 29% at the time. After reporting strong 1Q27 results, the company raised FY27 growth guidance to approximately 31% and offered positive commentary on AI product progress. Over the following three months, its share price rose approximately 90% and its valuation increased approximately 76%. Its EV/Sales multiple also increased from 9.4x before 1Q27 earnings to approximately 16.5x currently, an increase of approximately 75%. Bernstein now expects approximately 34% FY27 product revenue growth, above company guidance and consensus of 31%, but believes revenue outperformance alone is insufficient to generate meaningful upside after the substantial valuation rerating. The company must also provide commentary demonstrating continued AI product penetration, preferably supported by data, and show that AI momentum can complement core business growth. The report takes a more cautious long-term stance on Snowflake. It recognizes the innovation and execution promoted by the new CEO, but new products remain at an early stage, and the company faces competition from large cloud providers, AI laboratories, and enterprise application vendors in both its core market and the AI platform space. The report believes that, over the long term, substantial AI activity may occur within the enterprise application vendors and hyperscale cloud platforms where systems-of-record data resides. Snowflake can capture part of the opportunity, but absent continued validation, investors should not assume that new businesses will contribute significant long-term growth. As AI matures and zero-copy technology improves in FY28 and beyond, enterprises may also reduce data replication into Snowflake and instead use zero-copy approaches. The report will continue monitoring this trend. The profitability and valuation comparison further differentiates the views on the two companies. Snowflake's FY27E GAAP operating margin is approximately -20%, versus approximately 0% for MongoDB, making the report cautious about Snowflake's valuation. However, Snowflake improved GAAP profitability by 9 percentage points in FY26, and the report expects a similar improvement in FY27. From their April 2026 lows, MongoDB's and Snowflake's valuation multiples have recovered approximately 85% and 150%, respectively. Bernstein maintains its Outperform rating and $449 price target for MongoDB. Its detailed valuation applies a 9.5x EV/Sales multiple to forward sales per share of $42.7 twelve months from now and adds cash per share of $43.6. It maintains its Market-Perform rating and $250 price target for Snowflake, applying an 11x EV/Sales multiple to forward sales per share of $22.5 twelve months from now and adding cash per share of $2.9. Considering near-term execution potential, long-term market opportunity, competitive risk, and profitability differences, the report continues to prefer MongoDB over the long term while remaining on the sidelines regarding Snowflake.

Analysis framework

The report first compares the companies' current valuations with their respective two-year ranges, then combines a top-down assessment of cloud consumption demand in 2Q27 with company operating metrics to derive quarterly revenue growth forecasts. It subsequently breaks down the second-half growth rates implied by existing FY27 guidance and cross-checks them against historical performance, company guidance, and market consensus to assess the potential for guidance increases. Finally, it determines ratings and price targets using growth-adjusted valuations, GAAP margins, AI strategies, and the competitive landscape.

Methodology notes

• Event-Driven Trading and Behavioral FinanceExpectation Gaps/Expectation Management

  Beat-and-Raise and Key Threshold Analysis

  The report compares institutional forecasts, company guidance, and market consensus, distinguishing between a routine beat and an additional positive surprise sufficient to change full-year expectations. MongoDB's key threshold is Atlas growth of at least 29%, while Snowflake's key threshold is the simultaneous delivery of core growth and AI product momentum.

• Industry/Sector Analysis FrameworkSupply-demand framework

  IaaS/PaaS Consumption Demand Analysis

  The report treats enterprise efforts to prepare data assets for AI adoption and migrate to the cloud as sources of demand and uses this demand environment to explain Snowflake's and MongoDB's growth over multiple consecutive quarters.

• Company Fundamentals and Financial Framework

  Leading Operating Indicator Analysis

  The report uses Snowflake's NRR, CRPO, and growth in new workloads to assess the near-term revenue trajectory and validates the business improvement through the leading sequence among these indicators.

• Company Fundamentals and Financial Framework

  Segment-Level Implied Guidance Breakdown

  The report breaks down MongoDB's guidance using the revenue shares and implied growth rates of Atlas and Other Subscription, finding that second-half assumptions are materially below historical trends and thereby concluding that full-year guidance still has room to increase.

• Valuation Methodology

  EV/Sales Target Multiple Method

  The report applies target EV/Sales multiples to forward sales per share twelve months from now and then adds cash per share, deriving price targets of $449 for MongoDB and $250 for Snowflake.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• MongoDB (MDB)

  Benefits from cloud consumption demand, conservative FY27 guidance, and Atlas growth potential; Atlas growth of at least 29% could materially raise full-year expectations.

  Strengths

  Consistent management execution and solid performance over the past five quarters; conservative FY27 guidance assumptions; long-term exposure to a large and rapidly growing database market, with potential benefits from increased database usage driven by AI.

  Weaknesses

  Limited near-term direct participation in incremental AI platform revenue, while 2Q27 Atlas year-over-year growth also faces a higher comparison base.

  Comparison

  Its growth-adjusted valuation is broadly comparable to Snowflake's, but its FY27E GAAP operating margin of approximately 0% is better than Snowflake's approximately -20%.

  Risks

  A cloud business slowdown and increased competitive pressure from existing competitors or new entrants could impair growth, profitability, and valuation.

• Snowflake (SNOW)

  Benefits from improving NRR and CRPO, strong cloud consumption demand, and initial progress in AI products, but meaningful upside depends on simultaneous delivery of AI momentum and core growth.

  Strengths

  NRR has stabilized and improved, CRPO remains strong, and new customers and workloads are increasing; the new CEO has strengthened innovation and execution, while GAAP profitability improved by 9 percentage points in FY26.

  Weaknesses

  FY27E GAAP operating margin is approximately -20%; new products remain at an early stage, competition in AI and core markets is intense, and the current valuation has already recovered substantially.

  Comparison

  Its growth-adjusted valuation is broadly comparable to MongoDB's, but profitability is materially weaker, leading the report to maintain a Market-Perform rather than Outperform rating.

  Risks

  Intensifying competition in core markets, conflicts between AI capabilities and partners, insufficient continued validation of new projects, and the possibility that zero-copy technology will reduce demand for data replication in FY28 and beyond.

Key data

• MongoDB 2Q27 Revenue Growth ForecastApproximately 27%Above company guidance of approximately 24% and market consensus of 25%.
• MongoDB 2Q27 Atlas Growth ForecastApproximately 28%Approximately 29% in the prior quarter; at least 29% is viewed as the threshold for meaningful upside.
• MongoDB FY27 Revenue Growth ForecastAt least 23%Current company guidance and market consensus are approximately 20%.
• MongoDB Revenue MixAtlas approximately 72%; Other Subscription approximately 28%FY27 guidance implies approximately 23% Atlas growth and an approximately 8% decline in Other Subscription in 2H27.
• MongoDB Other Subscription Historical PerformanceApproximately 7% growth over the past 8 quartersApproximately 75% of contract value is recognized as recurring maintenance revenue, and the report considers the implied approximately 8% decline in 2H27 unlikely.
• Snowflake 2Q27 Product Revenue Growth ForecastApproximately 33%Above company guidance of 30% and market consensus of 31%.
• Snowflake FY27 Product Revenue Growth ForecastApproximately 34%Above current guidance and market consensus of 31%.
• Snowflake Subscription Revenue ForecastFY27E 5,984; FY28E 7,649; 2Q27E 1,453; 3Q27E 1,560The corresponding consensus estimates are 5,863, 7,405, 1,426, and 1,513.
• Snowflake Subscription Revenue Growth ForecastFY27E 34%; FY28E 28%; 2Q27E 33%; 3Q27E 35%Consensus estimates are 31%, 26%, 31%, and 31%, respectively.
• Share-Price Changes Over the Past Three MonthsMongoDB approximately +30%; Snowflake approximately +90%Both occurred following the prior quarter's earnings results and guidance updates.
• Snowflake EV/Sales ChangeIncreased from 9.4x to approximately 16.5xUp approximately 75% from before 1Q27 earnings.
• FY27E GAAP Operating MarginSnowflake approximately -20%; MongoDB approximately 0%Snowflake improved by 9 percentage points in FY26, and the report expects a similar improvement in FY27.
• Valuation Recovery from April 2026 LowsMongoDB approximately 85%; Snowflake approximately 150%Both companies' current valuations are at the high end of their two-year ranges.
• MongoDB Price Target$449Based on 9.5x EV/Sales, forward sales per share of $42.7 twelve months from now, and cash per share of $43.6.
• Snowflake Price Target$250Based on 11x EV/Sales, forward sales per share of $22.5 twelve months from now, and cash per share of $2.9.

Impact & implications

The report believes both companies have a high probability of delivering healthy 2Q27 beats and raising FY27 guidance, which could support already elevated valuations. However, the market has fully anticipated strong cloud consumption, making routine execution unlikely to trigger a meaningful rerating. If MongoDB achieves Atlas growth of at least 29%, it could materially raise full-year expectations; Snowflake must demonstrate both continued AI product penetration and solid core business growth. Over the long term, the report is more positive on MongoDB's exposure to a large market, core database positioning, and potential usage growth from AI, while Snowflake still needs sustained evidence to alleviate concerns regarding competition, early-stage products, and its profitability gap.

Risks

• MongoDB's greatest downside risk is slowing growth. If its cloud business experiences a deceleration similar to those previously seen by AWS and Azure, its revenue growth could be materially impaired.
• Rising competitive pressure from existing competitors and new entrants could impair MongoDB's growth, profitability, and valuation.
• Competition in Snowflake's core market is intensifying, while new products and AI projects remain at an early stage and still require continued business validation.
• If zero-copy technologies and products continue to improve in FY28 and beyond, enterprises may reduce data replication into Snowflake.

What to watch

• Monitor MongoDB's 2Q27 earnings on September 1 and Snowflake's on September 2, as well as changes to their full-year guidance.
• Monitor whether MongoDB's Atlas growth reaches at least 29%; 27% to 28% would be more consistent with a routine beat, while at least 29% could materially raise FY27 expectations.
• Monitor whether Snowflake discloses commentary and data showing continued AI product penetration while its core business also exceeds expectations.
• Monitor whether Snowflake's NRR, CRPO, and growth in new customers and workloads continue to improve.
• Monitor whether zero-copy technology prompts enterprises to reduce data replication into Snowflake in FY28 and beyond.