HSBC Upgrades Snowflake Stock Outlook
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 6 hours ago
0mins
Source: CNBC
- Rating Upgrade: HSBC upgraded Snowflake's rating from hold to buy and raised its price target from $176 to $289, implying a 20.8% upside from Thursday's close, reflecting strong confidence in the company's future growth prospects.
- Record Performance: Snowflake's stock surged over 36% on Thursday, marking its best single-day performance ever, primarily driven by the announcement of a $6 billion investment in compute resources from Amazon, indicating robust demand in the cloud computing sector.
- AI Tool Demand: The company reported better-than-expected fiscal first-quarter earnings, fueled by demand for its AI tool Cortex Code (CoCo), which has grown to over 7,100 accounts and contributed meaningful AI revenue, showcasing strong early momentum.
- Market Outlook: Despite a 44% decline earlier this year due to concerns over AI taking market share, analysts remain bullish on Snowflake, with 45 out of 52 covering analysts rating it a buy or strong buy, indicating confidence in its AI product adoption trajectory.
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Analyst Views on SNOW
Wall Street analysts forecast SNOW stock price to rise
33 Analyst Rating
30 Buy
3 Hold
0 Sell
Strong Buy
Current: 239.200
Low
237.00
Averages
278.19
High
312.00
Current: 239.200
Low
237.00
Averages
278.19
High
312.00
About SNOW
Snowflake Inc. is an artificial intelligence (AI) data cloud company. The Company provides a platform which powers the AI data cloud, enabling customers to consolidate data into a single source of truth to drive insights, apply AI to solve business problems, build data applications, and share data and data products. Its cloud-native architecture includes three independently scalable but logically integrated layers across storage, compute, and cloud services. The storage layer ingests massive amounts and varieties of structured, semi-structured, and unstructured data. The compute layer provides dedicated resources to enable users to simultaneously access common data sets for many use cases with minimal latency. The cloud services layer enables users to securely use AI within applications, tools, and processes. Its platform supports a wide range of product categories for customers’ business objectives, including analytics, data engineering, AI, applications and collaboration.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Snowflake Boosts Revenue Forecast Amid AI Sales Surge
- Significant Revenue Growth: Snowflake reported a 33% year-over-year revenue increase to $1.39 billion for the quarter ending April 30, demonstrating strong business growth potential in the AI-driven market.
- Expanding Customer Base: The number of customers generating over $1 million in revenue rose by 29% to 779, indicating successful sales growth among existing clients and the attraction of new business.
- Upgraded Annual Performance Forecast: Management raised its full-year product revenue forecast to $5.84 billion, reflecting a 31% growth rate, and increased the adjusted operating margin expectation to 13.5%, showcasing optimism about AI business prospects.
- AI-Driven Strategic Transformation: CEO Sridhar Ramaswamy emphasized that the success of AI tools is transforming Snowflake from a traditional data platform to the “control plane for the Agentic Enterprise,” further solidifying its market leadership position.
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- Nextpower Acquisition: Nextpower's stock surged 13% following its announcement of acquiring battery storage company Prevalon Energy for approximately $365 million, while also raising its full-year revenue guidance, indicating its strategic expansion in the renewable energy sector.
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- Business Model Strength: The company's Artificial Intelligence Platform is demonstrating strong monetization capabilities by compressing the typical corporate software sales cycle from nine months to less than five days, enhancing its competitiveness among free-cash-flow-positive enterprise platforms.
- Defensive Spending Opportunity: The recent federal investment of over $2 billion under the CHIPS Act signals a unique market opportunity for Palantir, positioning it to potentially benefit from the next wave of defensive capital.
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Snowflake Upgraded by HSBC After 36% Stock Surge
- Significant Stock Surge: Snowflake (SNOW) was upgraded by HSBC on Friday after its stock jumped over 36% due to stronger-than-expected results and guidance, along with a deal with Amazon (AMZN), indicating strong market confidence in its future growth.
- Valuation Premium Justified: HSBC analyst Stephen Bersey noted that Snowflake's non-GAAP PE stands at 130.0x, significantly above the sector median of 24.2x, with a projected non-GAAP EPS CAGR of 49.8% for FY26-31, showcasing its earnings durability driven by AI adoption.
- Target Price Increase: The analyst raised Snowflake's target PEG from 2.0 to 2.75 and increased the next 12-month non-GAAP EPS estimate from $1.81 to $2.11, resulting in a target price hike from $176 to $289, reflecting increased confidence in its long-term growth potential.
- Rating Upgrade: HSBC upgraded Snowflake's rating from Hold to Buy based on stronger earnings momentum, improved AI monetization visibility, and greater confidence in the company's long-term growth trajectory, signaling a positive outlook for its future performance.
See More
Major Wall Street Rating Changes Overview
- Dell Upgrade: Susquehanna upgraded Dell from neutral to positive, citing increased confidence in a sustainable 8-10% operating margin and a 6% free cash flow margin, which supports a potential rerating of its EV/sales multiple to 3x, indicating strong market potential.
- Viper Energy Initiation: RBC initiated coverage of Viper Energy with an Outperform rating and a $58 price target, highlighting its advantages in scale and core Permian focus, positioning it as a best-in-class mineral and royalty company.
- SentinelOne Buy Rating: Bank of America upgraded SentinelOne from neutral to buy, viewing its solid quarterly performance as a strong entry point after an 18% decline in after-hours trading, reflecting confidence in its future growth prospects.
- XPeng Upgrade: Macquarie upgraded XPeng from neutral to outperform, noting its volume growth in the Chinese EV market, while future investments in humanoids and robotaxis provide additional upside potential for its stock.
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- Market Outlook: Wedbush analyst Dan Ives predicts the Nasdaq will exceed 30,000 points by 2027, reflecting optimistic sentiment towards tech stocks, especially with a wave of mega-IPOs on the horizon.
- IPO Surge: Major tech firms like SpaceX, Anthropic, and OpenAI are expected to go public in 2026, and while these companies have yet to post annual profits, the market is optimistic about their future profitability, which could lead to market volatility.
- Industry Impact: Ives asserts that Anthropic represents the best AI model globally, which will increase pressure on OpenAI and further drive the development of the AI revolution, although some analysts warn this could signal a market top.
See More
Snowflake Boosts Revenue Forecast Amid AI Sales Surge
- Significant Revenue Growth: Snowflake reported a 33% year-over-year revenue increase to $1.39 billion for the quarter ending April 30, demonstrating strong business growth potential in the AI-driven market.
- Expanding Customer Base: The number of customers generating over $1 million in revenue rose by 29% to 779, indicating successful sales growth among existing clients and the attraction of new business.
- Upgraded Annual Performance Forecast: Management raised its full-year product revenue forecast to $5.84 billion, reflecting a 31% growth rate, and increased the adjusted operating margin expectation to 13.5%, showcasing optimism about AI business prospects.
- AI-Driven Strategic Transformation: CEO Sridhar Ramaswamy emphasized that the success of AI tools is transforming Snowflake from a traditional data platform to the “control plane for the Agentic Enterprise,” further solidifying its market leadership position.
See More
Energy Stocks Decline as Nextpower Acquires Battery Firm
- Energy Sector Decline: Energy stocks fell for the fourth consecutive day after President Trump indicated a potential deal to end the U.S.-Iran conflict, with OneOK leading the S&P 500 energy sector down over 3%, reflecting market concerns about the industry's outlook.
- Nextpower Acquisition: Nextpower's stock surged 13% following its announcement of acquiring battery storage company Prevalon Energy for approximately $365 million, while also raising its full-year revenue guidance, indicating its strategic expansion in the renewable energy sector.
- Dell Technologies Surge: Dell Technologies' shares jumped 29% after raising its full-year guidance, projecting adjusted earnings of $17.90 per share and revenue between $165 billion and $169 billion, significantly exceeding analyst expectations, showcasing strong market demand recovery.
- American Eagle's Poor Performance: American Eagle Outfitters' shares dropped 13% as comparable sales at its American Eagle banner fell 2% in Q1, with second-quarter guidance disappointing analysts, highlighting the sales pressure and intensified competition it faces.
See More
Palantir Technologies Consolidates in Range-Bound Trading
- Technical Setup: Palantir's stock has been consolidating between $130 and $160, with market optimism suggesting a potential breakout above $160 to retest the all-time high of $207.52.
- Business Model Strength: The company's Artificial Intelligence Platform is demonstrating strong monetization capabilities by compressing the typical corporate software sales cycle from nine months to less than five days, enhancing its competitiveness among free-cash-flow-positive enterprise platforms.
- Defensive Spending Opportunity: The recent federal investment of over $2 billion under the CHIPS Act signals a unique market opportunity for Palantir, positioning it to potentially benefit from the next wave of defensive capital.
- Institutional Investor Behavior: Institutional accumulation occurs aggressively whenever the stock approaches $130, reflecting confidence in Palantir's future performance, while the $160 resistance level provides support for bearish positions.
See More
Snowflake Upgraded by HSBC After 36% Stock Surge
- Significant Stock Surge: Snowflake (SNOW) was upgraded by HSBC on Friday after its stock jumped over 36% due to stronger-than-expected results and guidance, along with a deal with Amazon (AMZN), indicating strong market confidence in its future growth.
- Valuation Premium Justified: HSBC analyst Stephen Bersey noted that Snowflake's non-GAAP PE stands at 130.0x, significantly above the sector median of 24.2x, with a projected non-GAAP EPS CAGR of 49.8% for FY26-31, showcasing its earnings durability driven by AI adoption.
- Target Price Increase: The analyst raised Snowflake's target PEG from 2.0 to 2.75 and increased the next 12-month non-GAAP EPS estimate from $1.81 to $2.11, resulting in a target price hike from $176 to $289, reflecting increased confidence in its long-term growth potential.
- Rating Upgrade: HSBC upgraded Snowflake's rating from Hold to Buy based on stronger earnings momentum, improved AI monetization visibility, and greater confidence in the company's long-term growth trajectory, signaling a positive outlook for its future performance.
See More
Major Wall Street Rating Changes Overview
- Dell Upgrade: Susquehanna upgraded Dell from neutral to positive, citing increased confidence in a sustainable 8-10% operating margin and a 6% free cash flow margin, which supports a potential rerating of its EV/sales multiple to 3x, indicating strong market potential.
- Viper Energy Initiation: RBC initiated coverage of Viper Energy with an Outperform rating and a $58 price target, highlighting its advantages in scale and core Permian focus, positioning it as a best-in-class mineral and royalty company.
- SentinelOne Buy Rating: Bank of America upgraded SentinelOne from neutral to buy, viewing its solid quarterly performance as a strong entry point after an 18% decline in after-hours trading, reflecting confidence in its future growth prospects.
- XPeng Upgrade: Macquarie upgraded XPeng from neutral to outperform, noting its volume growth in the Chinese EV market, while future investments in humanoids and robotaxis provide additional upside potential for its stock.
See More
Anthropic Approaches $1 Trillion Valuation After Funding Round
- Successful Funding: Anthropic secured $65 billion in its latest funding round, bringing its valuation to $965 billion, highlighting strong investor demand for AI companies and indicating significant future market potential.
- Market Outlook: Wedbush analyst Dan Ives predicts the Nasdaq will exceed 30,000 points by 2027, reflecting optimistic sentiment towards tech stocks, especially with a wave of mega-IPOs on the horizon.
- IPO Surge: Major tech firms like SpaceX, Anthropic, and OpenAI are expected to go public in 2026, and while these companies have yet to post annual profits, the market is optimistic about their future profitability, which could lead to market volatility.
- Industry Impact: Ives asserts that Anthropic represents the best AI model globally, which will increase pressure on OpenAI and further drive the development of the AI revolution, although some analysts warn this could signal a market top.
See More
