On Monday, Snowflake Inc . (NYSE: NYSE:SNOW) received an upgrade in its stock rating by Wedbush from Neutral to Outperform. Accompanying this optimistic outlook, the firm also set a new price target for Snowflake shares at $190.00. The revision reflects Wedbush's confidence in the company's potential growth, particularly in the realm of artificial intelligence (AI).
The firm's analysis indicates that Snowflake has completed its optimization phase and is demonstrating consistent quarter-over-quarter growth in Product Revenues. This growth is seen as a strong indicator of the company's performance as it moves towards the fiscal year 2026, which is expected to be significantly influenced by AI developments.
According to the analyst from Wedbush, Snowflake is positioned at the center of the emerging AI market, which is anticipated to drive the company's growth in the next 12 to 18 months. The analyst's statement highlighted the company's strategic positioning: "Snowflake is in the sweet spot to benefit from AI use cases over the next 12 to 18 months."
The upgrade to an Outperform rating is based on a long-term Free Cash Flow (FCF) estimate, with the new price target representing a 30x multiple of this estimate. The firm's positive stance on Snowflake underscores the potential they see in the company's ability to capitalize on the growing AI sector.
Snowflake's new price target of $190.00 by Wedbush signals a significant level of confidence in the company's future financial performance and its role in the expanding AI market. Investors will be watching closely as Snowflake continues to navigate its growth trajectory in the technology industry.
In other recent news, Snowflake Inc. has demonstrated impressive financial performance, with significant top-line growth and an acceleration in bookings. This has led to an increase in price targets from several analyst firms, including Citi, KeyBanc Capital Markets, Monness Crespi Hardt, Jefferies, and TD Cowen. Snowflake's recent quarter was marked by new product contributions, with a consistent net revenue retention and significant achievements in artificial intelligence (AI) and data engineering.
The company's product revenue increased by 29% year over year, reaching $900 million, and its Remaining Performance Obligations (RPO) showed a 55% year-over-year growth, amounting to $5.7 billion. These strong financial results are attributed to the company's effective management and innovative strategies, particularly in areas of AI and data engineering.
Moreover, Snowflake recently acquired DataVolo to enhance its data connectivity and engineering capabilities and partnered with Anthropic to integrate powerful AI models into the Snowflake Cortex. Despite these positive developments, some firms, such as BTIG, have maintained a neutral stance, seeking more evidence of momentum with new product initiatives. These recent developments reflect a broad consensus among analysts about Snowflake's promising future in the data warehousing and cloud-based data analytics sectors.
InvestingPro Insights
Complementing Wedbush's optimistic outlook on Snowflake (NYSE: SNOW), recent data from InvestingPro provides additional context to the company's financial position and market performance. The company's market capitalization stands at $56.13 billion, reflecting its significant presence in the tech sector.
Snowflake's revenue growth remains robust, with a 30.28% increase over the last twelve months, aligning with Wedbush's observation of consistent quarter-over-quarter growth in Product Revenues. This growth trajectory supports the analyst's positive view on the company's future prospects, especially in the AI market.
InvestingPro Tips highlight that 33 analysts have revised their earnings upwards for the upcoming period, further reinforcing the positive sentiment surrounding Snowflake. Additionally, the company has seen a significant return over the last week, with a 31.4% price increase, and a strong 44.3% return over the past month. These short-term gains may be indicative of growing investor confidence in Snowflake's AI-driven growth potential.
It's worth noting that InvestingPro offers 12 additional tips for Snowflake, providing investors with a more comprehensive analysis of the company's financial health and market position. These insights can be valuable for those looking to make informed investment decisions in the dynamic tech sector.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.