Goldman Sachs Upgrades Snowflake: What Investors Need To Know

The current tailwinds for Snowflake Inc SNOW are likely to be secular trends that could drive growth for the foreseeable future, according to Goldman Sachs.

The Snowflake Analyst: Kash Rangan upgraded the rating for Snowflake from Neutral to Buy, while raising the price target from $270 to $275.

The Snowflake Thesis: The company is better positioned than its competitors for capitalizing on the continued widespread adoption of the cloud, big data, machine learning, artificial intelligence and secure data sharing, Rangan said in the upgrade note.

Despite this, Snowflake’s stock has declined by around 34% since mid-January, versus a downturn of around 11% “across our broader software coverage” and a decline of about 3% for the NASDAQ, he added.

“We believe Snowflake will continue to replace incumbent warehousing solutions owing to their scalable and elastic cloud native data platform while also capitalizing on net new workloads and use cases as DX drives greater digitization within the enterprise and business intelligence (BI) and analytics remains a top priority for spending,” the analyst wrote.

“Moreover, while we believe the company’s current large and rapidly growing TAM provides runway for continued expansion, we see opportunity for Snowflake to continue to expand its addressable market as the platform’s scalability, ease of use, and efficiency enable new use cases like secure data sharing through the company’s data exchange,” he further said.

SNOW Price Action: Shares of Snowflake had risen by 8.79% to $204.86 at the time of publication Friday.

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