Snowflake Inc. saw its stock price rise 3.2% to $169.55 on Tuesday, buoyed by an upgraded price target from BofA Securities. The financial institution raised its target to $205 from $195, maintaining a 'Buy' rating, ahead of the company's fiscal first-quarter earnings report scheduled for May 27 after the U.S. market close.
The upgrade comes as analysts point to sustained demand for Snowflake's data and artificial intelligence products. Mizuho Securities, in separate channel checks, reported positive readings from customers, partners, and resellers for Snowflake, along with Palo Alto Networks and CrowdStrike, indicating resilient interest in data modernization and AI tools.
Snowflake's upcoming earnings will cover the quarter ending April 30 and will be closely watched for signs that corporate spending on data and AI platforms is converting into product revenue, the key metric for the company. In its last guidance, Snowflake projected fiscal Q1 2027 product revenue between $1.262 billion and $1.267 billion, representing a 27% year-over-year increase. For the full fiscal year, the company expects product revenue of $5.66 billion, also up 27%.
Recent developments have provided additional momentum. CEO Sridhar Ramaswamy disclosed to Reuters that Snowflake secured its largest-ever deal, valued at over $400 million. The company has also entered into multiyear agreements worth $200 million each with OpenAI and Anthropic to integrate their models into its platform, underscoring its push into the AI business intelligence space.
BofA analyst Koji Ikeda described Snowflake as a 'share gainer' in AI business intelligence, a market where companies leverage data and software for faster decision-making. He expects robust demand to persist through the year, despite some short-term headwinds in the Middle East, which BofA noted are small in revenue terms.
However, not all analysts are equally bullish. UBS and Evercore ISI have reduced their price targets, citing competitive pressure from AI and a slowdown in Snowflake's core cloud data-warehousing business. The broader software sector has faced headwinds, with concerns about a potential 'SaaS rout of 2026' as investors question whether AI could disrupt the software-as-a-service subscription model.
Snowflake's new tools, such as Snowflake Intelligence for querying enterprise data and Cortex Code for developers, are part of its strategy to drive growth beyond traditional data warehousing. The company competes with Databricks in the data and AI market.
Investors will scrutinize next week's results for evidence that Snowflake's AI initiatives are generating real revenue growth, not just market excitement. The company must demonstrate that customers continue to store and analyze increasing amounts of data on its platform, while its AI offerings contribute meaningfully to the bottom line.
