Database provider Snowflake (SNOW) has been working to address the worries of customers in regulated industries, such as finance and healthcare, who want to use artificial intelligence models without compromising their sensitive data. To address this, Snowflake is in talks with AI developers like Google (GOOGL), Microsoft-backed OpenAI (MSFT), and Anthropic to offer secure access to their models, according to The Information.
These partnerships are crucial for Snowflake because customers had previously said that may switch to rival products from Amazon (AMZN) and Microsoft if they could not safely access AI models. The deals will allow Snowflake customers to build AI applications, such as automating insurance claims or creating ads, without sharing their data with AI providers. This is particularly important for regulated industries, where data security and privacy are top priorities.
The partnerships are expected to lead to significant revenue growth for Snowflake, as deals with Microsoft, OpenAI, and Anthropic are each projected to generate tens of millions of dollars in annual spending. The agreements will also help AI developers reach new customers in regulated fields who had previously been hesitant to use their products due to security concerns.
Is SNOW a Good Buy Right Now?
Turning to Wall Street, analysts have a Strong Buy consensus rating on SNOW stock based on 32 Buys, five Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 7% decline in its share price over the past year, the average SNOW price target of $213.40 per share implies 40.9% upside potential.
Questions or Comments about the article? Write to editor@tipranks.com