Key Points
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Snowflake’s product revenue growth sped up for a third straight quarter, to 37%.
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Datadog’s biggest customer cut its use of the platform in the third quarter.
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Palantir’s U.S. commercial revenue passed its U.S. government revenue for the first time.
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Snowflake (NYSE:SNOW), Datadog (NASDAQ:DDOG), MongoDB (NASDAQ:MDB), Cloudflare (NYSE:NET), Elastic (NYSE:ESTC), and Palantir (NASDAQ:PLTR) all sell software that companies depend on while they put artificial intelligence (AI) into everyday use.
Business is good at all six. Each grew revenue at least 15% year over year in its last reported quarter, and Palantir’s almost doubled. But AI shows up differently in each one’s results. For some, it’s speeding up growth, and for one it’s become a source of volatility.
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1. Snowflake’s third straight speedup
Snowflake runs a cloud platform where businesses store and analyze data, charging for the computing customers use.
Snowflake’s product revenue climbed 37% year over year to $1.49 billion in the fiscal second quarter of 2027 (the period ended July 31, 2026), up from 34% for fiscal Q1 and 30% the quarter before. CFO Brian Robins credited the core platform and “a meaningful step-up in AI revenue” in the earnings release.
Still, Snowflake lost $192 million on a generally accepted accounting principles (GAAP) basis, down from $298 million the year before.
2. Datadog’s biggest customer cut back
Datadog sells observability software, which tracks how a company’s apps and systems are working and flags issues.
Third-quarter revenue climbed 35% year over year to $1.20 billion, after 36% growth in the second quarter. AI-native customers added a high-single-digit number of percentage points to that growth, Datadog’s quarterly filing said. But the same filing said its largest customer, one of those AI-native companies, cut its usage, which might slow growth. And fourth-quarter guidance of $1.19 billion to $1.20 billion is about flat with the third quarter.
I think that shows the risk of leaning on a few fast-growing AI customers. Net income, though, more than tripled to $118 million.
3. MongoDB is growing faster again
MongoDB sells a database developers build applications on, mainly through its Atlas cloud service. For AI, it adds retrieval tools like vector search, which help AI apps find the right information in a company’s own data.
Revenue climbed 30% year over year to $771.8 million in MongoDB’s fiscal second quarter of 2027, which also ended July 31. CEO CJ Desai called it “the highest level of growth in several years,” crediting core enterprise workloads plus “early momentum with AI use cases.” MongoDB also swung to GAAP net income of $40.9 million from a $47.0 million loss.
4. Cloudflare: a network built for AI apps
“We have built the development platform for the AI-powered Internet,” CEO Matthew Prince said in the company’s third-quarter earnings release.
Cloudflare runs a worldwide network that speeds up and protects sites, and developers can also run apps on it. Third-quarter revenue climbed 39% year over year to $782.5 million, up from 36% growth in the second quarter and the company’s fastest rate in almost four years.
Of course, this growth might be costing more to deliver. Gross margin fell to 71.2% from 74% a year before, and the GAAP net loss widened to $34 million from around $1 million.
5. Elastic is the slowest grower
Elastic, best known for its Elasticsearch software, bills itself as the layer that finds the right company data and feeds it to AI models.
Elastic’s revenue grew 15% year over year to $478 million in its fiscal first quarter of 2027 (which also ended July 31), slowing from 16% and 18% in the two quarters before.
But current remaining performance obligations (contracted revenue expected in the coming year) climbed 21%, well ahead of revenue, and Elastic added a record number of customers with over $100,000 in annual contract value.
6. Palantir’s commercial boom
Palantir sells software, including its Artificial Intelligence Platform, that lets organizations put AI models to work in their own operations. Third-quarter revenue climbed 96% year over year to $2.31 billion. U.S. commercial revenue grew 148% to $984 million, almost matching the second quarter’s 149% rate, and topped U.S. government revenue for the first time. Net income more than doubled to $1.13 billion.
The price is the tough part
AI is already showing up in all six companies’ results. But going by expected non-GAAP (adjusted) earnings for each company’s next fiscal year, Cloudflare trades at around 170 times earnings and Snowflake at about 99 times earnings. Elastic is the cheapest at about 22 times earnings, arguably because its growth keeps slowing.
I think MongoDB strikes the best balance, at about 43 times earnings with 30% growth and a GAAP profit. Palantir costs more, at roughly $172 per share as of this writing, or about 69 times expected 2027 earnings. But it’s growing over three times as fast, and I’d consider buying both. As for Datadog, I’d want to see where its biggest customer’s usage settles before paying about 59 times earnings.
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Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Cloudflare, Datadog, MongoDB, Palantir Technologies, and Snowflake. The Motley Fool recommends Elastic. The Motley Fool has a disclosure policy.
