Snowflake (NYSE:SNOW) held its Summit 2024 and annual Analyst Day in San Francisco on Tuesday. Here's how analysts reacted:
Following the event, RBC Capital maintained an Outperform rating on the stock but cut the price target to $183 from $226 per share, saying the event did not significantly change their thesis.
"The focus centered on 1) the data cloud market is expected to be a $342B CY/28E TAM, 2) the company is focused on a rapid pace of innovation in areas such as AI, aided in part by their new CEO, and 3) the company continues to invest for profitable and efficient growth," said RBC.
In addition to a $342 billion calendar year 2028 TAM, analysts at RBC said Snowflake's management noted a big portion of what's driving the opportunity is their view public cloud services spending moving from $400 billion in FY23, to $2.3 trillion in FY33E.
"A good portion of time was spent on their focus on unstructured data/GenAI, where they have trailed peers. This is a huge focus for the company, and specifically their relatively new CEO," added RBC. "We think key to Snowflake's success will be gaining share in a competitive, yet rapidly growing GenAI market. Additionally, we look for growing contribution from new products."
Meanwhile, Evercore ISI maintained an Outperform rating and $225 price target on Snowflake following the event. The firm spoke with a number of the company's partners, customers, and management team members.
"At a high level, we believe the pace of innovation and urgency to ship AI products has accelerated since the appointment of CEO Sridhar Ramaswamy.," said Evercore.
Overall, analysts believe that while SNOW will likely remain in 'show me' mode in the near term, given the choppier macro backdrop, the analyst day helped highlight Snowflake's broadening product portfolio and its building out of an extensible data platform.
In addition, they said it showed the timing around the revenue/consumption impact from many of the newer products and a commitment to drive efficient growth despite a higher level of incremental investments in FY25.