Databricks Closing Gap With Snowflake
Startups are value stocks now
The key point is that Databricks was already closing the gap with Snowflake as a business before public markets fully priced that in. In 2023, Databricks was growing roughly as fast as Snowflake had at similar scale, but secondary buyers could buy Databricks at a lower revenue multiple. That discount mattered because both companies were competing for the same enterprise data budget, with Databricks adding warehouse, governance, and AI products on top of its lakehouse core.
-
The product battle had become much more direct than old labels like warehouse versus lakehouse suggest. Databricks SQL reached $400M annualized revenue in 2024, up 300% YoY, which shows Databricks was no longer just selling data science infrastructure, it was taking analytic warehouse workloads that had been Snowflake's home turf.
-
Databricks also had a packaging advantage. Unity Catalog became the control layer for who can see which tables, files, and models, then fed adjacent sales into AI training and model products. That makes the sales motion more like buying one governed data and AI stack, not stitching together separate warehouse, governance, and ML tools.
-
The valuation comparison in the 2023 market was really about public versus private price formation. Snowflake's multiple was set every day in public markets after the 2022 software reset, while Databricks traded in thinner secondary markets where private shares had sold off hard even as underlying revenue kept compounding. That mismatch created the appearance of a cheaper asset with similar strategic quality.
Going forward, the comparison shifts from who is cheaper on a point in time multiple to who captures more of the enterprise data and AI workflow. If Databricks keeps turning governance and AI products into reasons to consolidate spend on its platform, the market will increasingly value it less like a single product and more like a broader system of record for enterprise data work.