Bank of America (BofA) said that Snowflake is still "one of the fastest-growing stories in software," reaffirming its buy rating and maintaining it as a key choice within software infrastructure.
Analyst Koji Ikeda said that the bank sees Snowflake as well positioned to benefit from the acceleration of enterprise spending on data analytics and artificial intelligence, given its role as a key cloud platform for data.
In the client memo, Ikeda said the central question for investors is whether Snowflake can maintain product revenue growth in the "top 20% year-over-year" or perhaps "re-accelerate into the thirties." He argued that this outcome is "entirely within reach," pointing to a broader product suite, strong AI-related demand, and increasing customer usage.
"The snowstorm is just beginning to form around the widespread adoption of artificial intelligence, and we believe that Snowflake will play a foundational role," he wrote.
Bank of America expects Snowflake's growth trajectory to remain "best-in-class in software infrastructure," significantly ahead of peers growing at around 10%.
The bank also raised its price target to $275, stating that it updated its valuation framework "to reflect our updated view on growth, risks, and peer multiple contraction."
Snowflake "is rapidly becoming the enterprise data king in the cloud," Ikeda said, referring to its OLAP lakehouse architecture, which allows customers to scale compute and storage independently to optimize performance and manage costs.
While he acknowledged that the stock "is not cheap," with shares trading at a "123% premium" to peers, the analyst said the valuation looks more reasonable on a growth-adjusted basis, as Snowflake "trades at the same multiple."
