For cloud computing stock Snowflake (NASDAQ:SNOW), things weren’t looking good for a while there. But things may be turning around, and that’s got Citi analysts reconsidering their position. That reconsideration was sufficient to send Snowflake stock up 3.5% in Monday afternoon’s trading.
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Citi, via analyst Tyler Radke, noted that the numbers coming out for July cloud operations were looking up. Cloud hyperscaler numbers were holding on, and tailwinds from generative AI were also lending a hand. That—along with a surprisingly positive analyst day back in late June—provided a nice boost to Snowflake’s overall picture. It also left Radke “cautiously optimistic” that, maybe, businesses were finally realizing where the sweet spot was in terms of cloud-based optimization.
What really tells the story going forward, however, will be Snowflake’s upcoming earnings report, set to hit this Wednesday. While Snowflake’s growth rate has still been substantial, it also hasn’t been quite as substantial as it was in the past. In fact, Snowflake management has already called for investors to watch out for another drop in product revenue growth rates, which likely won’t be taken well. However, if this is the last such major drop, and expectations have finally met their match in reality, that may be all Snowflake needs to stage a recovery.
Analysts, however, are, as a whole, more optimistic. With 25 Buy ratings, seven Holds, and one Sell, Snowflake stock is considered a Moderate Buy by analyst consensus. Meanwhile, with an average price target of $189.76, Snowflake stock comes with an upside potential of 24.2%.
