How Is Snowflake Poised To Beat Expectations Ahead? This Bullish Analyst Answers

Shares of Snowflake Inc SNOW climbed in early trading on Thursday amid chatter on Reddit around the stock valuation.

The Bozeman, Montana-based company is likely to sustain more than 20% growth, driven by continued legacy data warehouse migrations, increasing public cloud migrations, expansion of the company’s product portfolio expansion, and the use of its platform for developing and hosting GenAI workloads, according to KeyBanc Capital Markets.

The Snowflake Analyst: Eric Heath initiated coverage of Snowflake with an Overweight rating and price target of $185.

The Snowflake Thesis: The database TAM (total addressable market) is expected to expand to $241 billion by 2028, Heath said in the initiation note.

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Snowflake’s cloud data warehouse is expanding “horizontally across OLAP from data warehouse to data lake and into OLTP with Unistore” as well as “vertically to data science and GenAI workloads, data engineering, and visualization/app layer,” the analyst stated.

The company’s “vertical expansion into data science, GenAI, and visualization/application layer” expands the TAM to $350 billion by 2028, he added.
“We forecast FY25/FY26 revs ~0.5% above cons. given our positive-leaning view on iceberg opening new workloads, GenAI and Cortex adoption, and improving consumption trends,” Heath further wrote.

SNOW Price Action: Shares of Snowflake had risen by 1.69% to $155.56 at the time of publication on Thursday.

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