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Bank of America Tweaks Snowflake Stock Price Target Before Earnings
22 days agoUS
Despite a challenging year for Snowflake (SNOW), with the stock down 21.92% year-to-date, Bank of America (BofA) remains optimistic. BofA Securities has raised its price target on Snowflake, maintaining a Buy rating before the company's May 27 earnings report. This move signals confidence in Snowflake's potential within the rapidly growing AI business intelligence sector.
Key Insights
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BofA Securities increased its price target for Snowflake from $195 to $205, implying a roughly 20% upside from current levels.
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The firm's confidence stems from Snowflake's growing market share in the AI business intelligence sector.
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Over 9,100 accounts were utilizing Snowflake AI features as of fiscal year-end 2026, including major companies like Toyota Motor Europe and United Rentals.
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Snowflake Intelligence, the company's AI platform, has seen rapid adoption, growing to nearly 2,500 accounts in just three months.
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Partnerships with Anthropic, Google Cloud, and OpenAI provide native access to leading foundation models within the Snowflake platform.
Why this matters: BofA's increased price target suggests that despite recent underperformance, Snowflake is well-positioned to capitalize on the expanding AI business intelligence market. The company's growing AI adoption numbers and strategic partnerships support this optimistic outlook.
In-Depth Analysis
Snowflake (SNOW) has experienced a challenging period, contrasting with the broader market's upward trajectory and the AI software sector's rapid growth. However, Bank of America's decision to raise its price target reflects a belief in Snowflake's long-term potential.
BofA's analyst, Koji Ikeda, emphasized that the firm's confidence is rooted in Snowflake's ability to execute within the AI business intelligence space over the next 18 months. This is not based on short-term results but rather on a higher multiple due to increased confidence in Snowflake's execution capabilities.
While some analysts, like those at UBS and Evercore ISI, have pulled back their targets due to competition concerns and core cloud data warehousing deceleration, BofA believes that the AI tailwind is strong enough to overcome these challenges.
Snowflake's Q4 fiscal 2026 results provide a baseline for the upcoming earnings report:
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Q4 revenue of $1.28 billion, up 30% year over year
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Product revenue of $1.23 billion, up 30% year over year
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Net revenue retention rate of 125%
The company's Q1 fiscal 2027 guidance projects product revenue of $1.262 billion to $1.267 billion, representing approximately 27% year-over-year growth.
The AVEVA collaboration, announced on May 19, further strengthens Snowflake's position by enabling direct zero-copy integration between AVEVA's industrial intelligence platform and Snowflake's AI Data Cloud.
FAQs
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Q: Why is Bank of America raising its price target for Snowflake?
BofA is confident in Snowflake's ability to capitalize on the growing AI business intelligence market.
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Q: What are some key indicators of Snowflake's AI adoption?
Over 9,100 accounts were using Snowflake AI features as of fiscal year-end 2026, and the Snowflake Intelligence platform has seen rapid growth.
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Q: What is the significance of the AVEVA collaboration?
It enables direct zero-copy integration between AVEVA's industrial intelligence platform and Snowflake's AI Data Cloud, streamlining data pipelines for industrial customers.
Key Takeaways
For investors and industry observers, here are the key takeaways:
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Snowflake's stock underperformance may present an entry point for those bullish on its AI potential.
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The company's Q1 fiscal 2027 earnings report on May 27 will be a crucial test of its ability to maintain growth momentum.
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Snowflake's strategic partnerships and expanding AI capabilities position it as a central player in the enterprise AI revolution.
Discussion
Do you think Snowflake will meet or exceed expectations on May 27? Let us know your thoughts!
Share this article with others who need to stay ahead of this trend!
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