Snowflake (SNOW) is Capitalizing on AI as a Demand Engine for Enterprise Data Workloads Soumya Eswaran Mon, October 12, 2026 at 9:50 AM EDT 3 min read ^GSPC -0.08% SNOW -2.41% Trade SNOW on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Baillie Gifford & Co, an independent investment management firm, released its third-quarter 2026 investor letter for "US Equity Growth Strategy". The letter can be downloaded here. While AI safety and human control concerns dominated recent industry discussions, the quarterly letter highlights the massive, untapped potential of deploying existing AI capacity into industrial applications. The letter emphasizes identifying sustainable competitive advantages in business model integration over temporary semiconductor scarcity or raw model scale. Against this backdrop, the US Growth portfolio posted positive returns, outperforming the S&P 500 and Russell 1000 Growth indices by approximately four percentage points this quarter. This marks a continued recovery over the past six months, following a difficult end to 2025 and the onset of 2026, supported by fundamental company-level progress. YTD, the portfolio returned -6.7% (net) compared to the S&P 500 Index's 15.7%. Also, check the strategy's top five holdings to see its best picks in 2026.
In its Q3 2026 investor letter, Baillie Gifford US Equity Growth Strategy highlighted Snowflake Inc. (NYSE:SNOW), a cloud-based data platform company that enables customers to unify, manage, and collaborate on data across multiple cloud providers. Snowflake Inc. (NYSE:SNOW) contributed positively to overall performance during the quarter. On October 09, 2026, Snowflake Inc. closed at $368.89, with a $130.14 billion market capitalization. Snowflake Inc. posted a 68.17% YTD gain, trading within a 52-week range of $118.30 to $384.56.
Baillie Gifford US Equity Growth Strategy stated the following regarding Snowflake Inc. (NYSE:SNOW) in its Q3 2026 investor letter:
"For example, how does a company use AI to create more value from its distribution, proprietary data, customer relationships, network effects, intellectual property, physical assets and even its culture?
Snowflake Inc. (NYSE:SNOW) is a good example. Earlier this year, its shares were caught in the broad sell off in software as investors worried that AI would either replace established platforms (or at least, reduce the overall profitability of SaaS companies). At the time, we suggested this concern was overdone for Snowflake given its deep systems of record it holds authoritative versions of critical data that AI models cannot replicate. AI is helping customers migrate workloads and extract more value from Snowflake's underlying data platform. So far, AI is an amplifier for Snowflake's business rather than a threat. Snowflake and Shopify were also positive contributors. Snowflake's product revenue grew 37 percent, accelerating for a third consecutive quarter, while operating margins expanded."
Snowflake Inc. (NYSE:SNOW) is not on our list of the 40 Most Popular Stocks Among Hedge Funds. According to our database, 103 hedge fund portfolios held Snowflake Inc. (NYSE:SNOW) at the end of the second quarter, compared to 80 in the previous quarter. While we acknowledge the potential of Snowflake Inc. (NYSE:SNOW) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
In another article, we discussed Snowflake Inc. (NYSE:SNOW) and shared Artisan Developing World Fund's views on the company. In addition, please check out our hedge fund investor letters Q3 2026 page for more investor letters from hedge funds and other leading investors.
This article is originally published at Insider Monkey.
