Shares of Snowflake Inc. (SNOW) edged lower in early trading Thursday, retreating from a sharp pre-earnings rally as investors weighed a bullish call from Bank of America against lingering competitive concerns. The stock was quoted at $166.97, down approximately 1.5% from Wednesday's close.
BofA Lifts Target, Cites Strong Demand
Bank of America Securities raised its price target on Snowflake to $205 from $195, reiterating a Buy rating. Analyst Koji Ikeda kept his financial forecasts unchanged but increased the valuation multiple to 10.3 times expected fiscal 2027 revenue from 9.8 times, citing "higher execution confidence." Ikeda argued that robust demand momentum into 2026 should continue unabated, and that Snowflake is gaining market share in AI-powered business intelligence, where companies use software to analyze and act on corporate data.
RBC Cuts Target, Flags Competition
However, the bullish view is not unanimous. RBC Capital Markets lowered its price target on Snowflake to $220 from $245 while maintaining an Outperform rating. The reduction highlights ongoing competitive pressures in the data and artificial intelligence space, particularly from rival Databricks. BofA itself acknowledged some concerns about weaker demand in the Middle East, though it noted the region represents at most 1% of Snowflake's revenue.
Key Catalysts: Q1 Earnings on May 27
Snowflake is scheduled to report fiscal first-quarter results after the U.S. market close on May 27. The quarter, which ended April 30, will test whether demand for its cloud data platform and newer AI tools is holding up after a volatile period for software stocks. The company previously guided for fiscal Q1 product revenue of $1.262 billion to $1.267 billion, representing 27% year-over-year growth. For the full fiscal 2027 year, Snowflake expects product revenue of $5.66 billion, also up 27%.
Momentum from Q4 Results
Snowflake closed fiscal 2026 with strong momentum. Fourth-quarter revenue rose 30% to $1.28 billion, product revenue climbed 30% to $1.23 billion, and remaining performance obligations—contracted revenue not yet recognized—surged 42% to $9.77 billion. CEO Sridhar Ramaswamy said the company has built a foundation that makes AI safe and scalable. More than 9,100 accounts were using Snowflake AI features in the final weeks of Q4, and its Snowflake Intelligence product reached nearly 2,500 accounts within three months of launch.
Analyst Views Mixed but Constructive
Other analysts have also expressed optimism. Citizens analyst Patrick Walravens maintained an Outperform rating and a $325 price target, highlighting Snowflake's platform spanning data engineering, analytics, AI, and applications, as well as over 430 new capabilities shipped in fiscal 2026. He acknowledged competition from Databricks but views the market as large enough for both companies.
Risks Remain
Despite the positive outlook, Snowflake has warned of several risks. In a March filing with the SEC, the company cited potential headwinds from customer budget rationalization, changing pricing and product features, cybersecurity threats, and the ability to compete in a market where AI is driving significant disruption.
With earnings just days away, investors will be closely watching for signs of sustained consumption growth, contract renewals, and any shifts in competitive dynamics. A clean quarter and firm guidance could support BofA's view that Snowflake is still gaining share. Any indication of slowing consumption or budget shifts to rivals would make the recent rally harder to defend.
