Snowflake [SNOW] is a US-headquartered, cloud-based data storage and management company.
Snowflake’s software can run on Amazon’s [AMZN] Amazon Web Services, Alphabet’s [GOOGL] Google Cloud Platform and Microsoft’s [MSFT] Azure. Customers can share data across multiple systems using Snowflake’s data warehouse.
According to Mordor Intelligence, the global data warehouse market is forecast to grow from a valuation of $11.12bn in 2025 to a valuation of $18.82bn in 2030, representing a CAGR of 11.10% over the period.
This stock spotlight will look at why analysts are bullish on SNOW stock for 2025, largely on the back of a generative artificial intelligence (AI) product push. It will also highlight Snowflake’s recent financial performance and ask whether slowing revenue growth could be a cause for concern.
SNOW Stock: An Analyst Top Pick
Snowflake has entered 2025 on a positive note, being named as a stock pick by both RBC Capital and Piper Sandler.
“The punchline is that we think underlying demand trends have improved as we think 2025 benefits from an increase in new app and AI workloads as well as momentum from newer products including Snowpark and Cortex,” said RBC Capital analysts.
They selected Snowflake as a large-cap pick based on several factors, including its focus on generative AI. CEO Sridhar Ramaswamy “is well-equipped to lead the company’s product strategy and go-to market focus in a generative AI world,” they added.
Piper Sandler analysts picked Snowflake on the basis that it is “poised to capitalize on AI trends”. Ramaswamy’s appointment in Q1 2024 “could begin to bear fruit” over the next 12 months.
SNOW Stock’s Disappointing 2024
Snowflake’s generative AI push could help to revive its share price, which dropped sharply following the release of its Q4 2023 results on February 28.
SNOW stock is down 13.36% in the past 12 months through January 15 to $165.71. While it remains some way down from its 52-week high of $237.72 set on February 12, the share price has gained 54.68% since setting a 52-week low of $107.13 on September 6, popping on the back of its latest results on November 20.
Snowflake’s Revenue Keeps Pace
Revenue for Q3 2025, which ended October 31, was up 28% to $942m, while product revenue — the more important metric — was up 29% to $900m.
The company raised its full-year product revenue guidance fueled by AI demand. It is now guiding towards $3.43bn, up from $3.36bn, which would represent a 29% increase from fiscal 2024’s product revenue.
“There’s a very long runway because analytics flows over seamlessly and fluidly into things like machine learning. And AI then becomes even more of an accelerant because you can now go from unstructured data to structured data very, very easily,” said Ramaswamy on the Q3 earnings call.
In comparison to Snowflake, Datadog [DDOG], another company that helps customers optimize their businesses, reported revenue growth of 26% in Q3. Popular AI software stock Palantir [PLTR] reported growth of 30% for the same quarter.
Here’s how the fundamentals of the three stocks compare.
| SNOW | DDOG | PLTR |
Market Cap | $54.70bn | $47.88bn | $155.22bn |
P/S Ratio | 16.14 | 20.92 | 61.94 |
Estimated Sales Growth (Current Fiscal Year) | 27.91% | 24.99% | 25.86% |
Estimated Sales Growth (Next Fiscal Year) | 23.33% | 21.88% | 24.74% |
Source: Yahoo Finance
SNOW stock may seem cheap compared to Palantir based on their P/S ratios. However, Snowflake could also be considered highly overvalued when you consider that the average ratio for the software industry is 4.82.
SNOW Stock: The Investment Case
The Bull Case for Snowflake
Snowflake continues to enhance its product offering by introducing more generative AI products.
In November 2024 it announced its intent to acquire Datavolo, a start-up that makes it easier to organize unstructured data that can be used to feed generative AI applications. That same month it also brought Anthropic’s large language models to its platform.
Evercore analyst Kirk Materne wrote in a note following Q3 results that Snowflake “should see a bigger lift from AI-related products” in fiscal 2026. He is forecasting product revenue will grow approximately 21% in the next year. His price target has been raised from $170 to $190, an upside of 14.66% from the most recent closing price.
As of the end of last June, more than 2,500 customers were making use of Snowflake’s AI products on a weekly basis.
The Bear Case for Snowflake
Despite the aggressive push to add AI products to its platform, Snowflake’s revenue growth continues to slow, from 108.75% in Q3 2022, 66.77% in Q3 2023, and 31.78% in Q3 2024, to 28.34% in Q3 2025.
This may not be an immediate cause for concern, but investors might wish to keep an eye on this metric. If it continues to fall, then it could raise questions about how much value new products are adding and how many customers are willing to pay for them.
Part of the problem is that Snowflake is coming under pressure from Databricks, which is in some quarters thought to offer better native AI capabilities, and customers are believed to be migrating from the former to the latter.
Conclusion
Snowflake could be a stock to watch in 2025, according to analysts. However, its aggressive pursuit of AI deals comes at a time when revenue growth is slowing and Snowflake faces stiff competition from Databricks. These concerns could weigh on SNOW stock.
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