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UBS singled out Snowflake as a potential beneficiary of the artificial intelligence trend. The bank updated the cloud-based data storage company to buy from neutral. Analyst Karl Keirstead also raised his 12-month price target to $265 from $210, signaling upside of 27% from Tuesday’s close. Despite shares of Snowflake rallying 35% this year, Keirstead said “it’s not too late to get more constructive.” SNOW YTD mountain SNOW YTD chart “We’re becoming increasingly confident in the prospect that we’re just a few quarters into what could prove to be a multi-year enterprise investment cycle in the data layer, based on industry checks … as well as the results from Snowflake, Palantir and Databricks,” Keirstead wrote. This optimism is rooted in Snowflake’s customers and partners signaling spending in their data stacks has increased. In many cases, this uptick has been due to greater value associated with corporate data to drive the performance of AI applications, the analyst said. “As Snowflake argues, and we agree, enterprises increasingly need ‘AI ready’ data such that Snowflake, Palantir and Databricks have emerged as AI beneficiaries,” he added. “This is also evident in the efforts of SaaS firms Salesforce, ServiceNow, SAP and others to move into the data software space.” Meanwhile, Snowflake’s competition with Databricks looks more manageable that previously indicated, with the overall market growing quickly enough that there seems to be room for both players. Another plus is Snowflake’s success so far in broadening out its data management portfolio, which has positioned itself to grab more data wallets share.
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