Shares of Snowflake (NYSE:SNOW) advanced on Wednesday after Bank of America Securities raised its rating on the data cloud company to Buy from Neutral, while lifting its price target to $240 from $220. The upgrade reflects improving demand dynamics and a constructive long-term view tied to artificial intelligence and data services.
The new price objective represents nearly a 25% premium to Snowflake’s most recent closing price.
BofA analysts highlighted multiple indicators suggesting momentum ahead of the company’s upcoming August 27 earnings release. “We upgrade Snowflake to Buy from Neutral, and raise our estimates, and PO to $240…given three distinct proprietary data sources which point to momentum in Snowflake’s data warehouse and emerging Cortex AI and Snowpark developer businesses.”
For the second quarter, the bank forecasts product revenue of roughly $1.06 billion, about 2.5% higher than company guidance, supported by stronger web traffic trends. Channel checks also suggested a favorable operating environment, with partners citing rising customer reliance on Snowflake as an essential part of their AI technology stack. Adoption of both Snowpark and Cortex AI was described as particularly strong.
Analysts added that Snowflake’s demand pipeline remains healthy, with evidence of shorter sales cycles and flexible budgets earmarked for AI-related initiatives. Survey work also reinforced BofA’s bullish thesis. The bank’s first customer poll indicated accelerating spending intentions, with respondents planning to lift spending by 12% over the next year compared with 9.5% in the prior survey.
More than half of surveyed customers reported using Snowflake for AI workloads, highlighting the company’s evolution into a broader AI-driven data platform.
Potential headwinds include intensifying competition and the inherent volatility of Snowflake’s consumption-based revenue model. Even so, analysts emphasized the scale of the $155 billion AI software market as a compelling growth opportunity.
“While we believe that Q2 earnings will be a catalyst for the stock given multiple positive data points outlined below, our call is for outperformance over the long term given incremental traction with products addressing a significant larger addressable AI market for software of $155bn,” wrote BofA analyst Brad Sills.
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