UBS raises Snowflake stock rating to buy on increased data spending

On Wednesday, UBS analysts upgraded Snowflake Inc . (NYSE: NYSE:SNOW) stock rating from Neutral to Buy. The analysts set a new price target of $265, up from the previous target of $210, citing several positive factors influencing their decision. The upgrade adds to growing analyst optimism, with InvestingPro data showing 24 analysts recently revising their earnings estimates upward. The stock, currently trading near its 52-week high, has delivered an impressive 52% return over the past year.

The analysts noted a noticeable increase in spending on Snowflake’s data stacks, driven by the enhanced value of corporate data to improve AI application performance. This trend aligns with Snowflake’s position as a key player in providing ’AI-ready’ data, alongside other companies like Palantir (NASDAQ:PLTR) and Databricks. Enterprises are increasingly recognizing the importance of such data in the AI landscape. This market positioning has helped drive Snowflake’s robust revenue growth of 27.5% year-over-year.

UBS analysts also highlighted that competition with Databricks is more manageable than previously anticipated. They believe the growing market for data solutions offers enough room for both companies to thrive. This positive outlook is based on the rapid expansion of the overall market, which is accommodating multiple players.

Another reason for the upgrade is Snowflake’s successful expansion of its data management portfolio. The company has extended its offerings beyond its core data warehouse product, positioning itself to capture a larger share of the data management market. This strategic move is viewed as a strong indicator of Snowflake’s ability to adapt and grow.

In conclusion, the upgrade reflects UBS’s confidence in Snowflake’s ability to capitalize on the increasing demand for data solutions and its effective competition management. The new price target of $265 underscores the analysts’ optimistic view of the company’s future prospects.

In other recent news, Snowflake Inc. announced a series of developments aimed at enhancing its AI Data Cloud capabilities. At the Snowflake Summit 2025, the company introduced new AI-driven products, including SnowConvert AI and Cortex AISQL, designed to improve data analytics and streamline migrations from older systems. Additionally, Snowflake revealed the launch of its Standard Warehouse - Generation 2, which promises analytics performance that is 2.1 times faster than its predecessor. In a strategic move, Snowflake also announced its intention to acquire Crunchy Data, a provider of open-source PostgreSQL technology, to bolster its AI-ready database solutions. This acquisition aims to integrate PostgreSQL into Snowflake’s platform, enhancing security and compliance features for enterprise applications. Furthermore, Snowflake is playing a significant role in Canva’s growth strategy by providing a scalable data platform to enhance Canva’s B2B segment. These developments reflect Snowflake’s ongoing efforts to innovate and expand its offerings in the AI and data management sectors.

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