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Analyst Bullish on Snowflake's AI Future
20 May
Summary
- Analyst reiterates Market Outperform rating on Snowflake with a $325 price target.
- Snowflake's AI opportunity is boosted by Intelligence and Cortex Code.
- Market for data and AI is projected to reach $355 billion by 2029.
Citizens analyst Patrick Walravens has reiterated a Market Outperform rating for Snowflake Inc. (SNOW), setting a price target of $325.00. This positive outlook comes despite the stock's 35% decline over the past six months, with InvestingPro analysis suggesting current shares are undervalued.
Snowflake's comprehensive data platform, addressing data engineering, analytics, AI, and applications, is a key factor. The company released over 430 product capabilities in FY26, underscoring its rapid development. The analyst emphasized Snowflake's AI potential, particularly through Snowflake Intelligence and Cortex Code, which offer inherent permissions, governance, and security. These features are expected to overcome major hurdles for enterprises adopting AI agents and applications.
The addressable market for data and AI is substantial, projected to grow from $170 billion in 2024 to $355 billion by 2029. The recent acquisition of Observe further expands this opportunity by an additional $50 billion from the IT operations market.
Citizens believes the market is large enough to accommodate both Snowflake and competitor Databricks. The firm also welcomed Brian Robins as CFO and acknowledged CEO Sridhar Ramaswamy's technological expertise. Investors are anticipating Snowflake's upcoming earnings report in eight days.
Other analysts have also shared recent updates. UBS lowered its price target to $210 while maintaining a Buy rating, and Evercore ISI reduced its target to $200, both citing AI competition and growth deceleration concerns. Piper Sandler, however, reiterated an Overweight rating with a $230 price target, emphasizing AI opportunities.
The broader software sector saw a boost following Datadog's positive results, leading to a 9.3% jump in Snowflake shares. Other companies like MongoDB and Cloudflare also experienced gains. Thoma Bravo CEO Orlando Bravo expressed optimism about SaaS stocks, viewing them as attractive buying opportunities due to their market leadership and AI leverage.
