Wells Fargo Raises Price Target on Snowflake to $500 Amid AI Growth Potential
Wells Fargo has raised its price target for Snowflake (SNOW) from $320 to $500, implying an 85% potential gain. The bank maintains an overweight rating and cites the growing role of artificial intelligence in accelerating Snowflake's growth. Earlier this year, concerns about AI disrupting traditional software-as-a-service models caused a significant drop in SNOW shares; however, they have since rebounded more than 20%. Analyst Ryan MacWilliams argues that Snowflake is well-positioned to benefit from AI advancements without the need for heavy capital expenditures or model development. According to Wells Fargo's survey of Snowflake customers, AI adoption has led to increased spending and data consumption on its platforms. The firm believes SNOW deserves a higher valuation multiple compared to peers like Cloudflare (NET) and CrowdStrike (CRWD). Currently trading at 127 times forward earnings, MacWilliams suggests the stock should trade closer to those companies' multiples of around 139-204x. Following the upgraded price target, SNOW shares rose more than 1%. The majority of analysts on LSEG rate Snowflake as a buy or strong buy.
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Topics: analyst report artificial intelligence price target upgrade software-as-a-service (SaaS)