Snowflake (SNOW) was recently endorsed by Wedbush as one of the top tech companies positioned to lead the “AI Revolution” in 2025. I strongly agree, as Snowflake’s AI advancements, powerful cloud data platform, and rigorous focus on enterprise needs uniquely position it for success. While it is important to highlight that Snowflake’s premium valuation warrants caution, it’s hard not to praise its remarkable growth trajectory and excellent positioning, making it a compelling pick in the space. Therefore, I am bullish on SNOW stock.
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Snowflake Is Uniquely Positioned to Benefit from the AI Revolution
If you’re not too familiar with what Snowflake does, its main strength is pulling together, organizing, and analyzing huge amounts of data in the cloud. This is super important for companies trying to use AI in their operations. Snowflake makes it easy by getting rid of data silos and offering one platform where businesses can actually use AI insights in real, practical ways, a trend that aligns perfectly with today’s needs of enterprises aiming to adopt AI at scale.
In recent years, Snowflake has improved its AI offers by buying startups like Neeva, Streamlit, and Applica, which bring expertise in AI-driven search, visualization, and data transformation. Merging these startups with the core business has boosted Snowflake’s overall prospects for helping enterprises deploy machine learning models. This catalyst has made the platform more valuable for AI use cases. Another noteworthy development is Snowflake Cortex, a tool that enables businesses to build AI-driven applications directly on Snowflake’s platform, which has been a game-changer in positioning the company in today’s landscape.
In the meantime, Snowflake’s partnerships with some of the most prominent players in the space, like Anthropic and Microsoft (MSFT), have taken the company to the next level. These collaborations have brought useful AI models into Snowflake’s platform, giving clients access to advanced analytics and generative AI tools. Thanks to its user-friendly, secure, and scalable approach to handling AI workloads, it’s no surprise that Snowflake has become an essential partner for businesses aiming to succeed in the AI era.
Strong Momentum Reflected in Q3 2025 Results
Snowflake’s most recent Q3 Fiscal 2025 results show how the company thrives in today’s fast-moving tech world, where AI and relentless innovation are shaking things up by the day. The company achieved $942.1 million in total revenue, marking a robust 28% year-over-year growth, with product revenue increasing by 29% to $900.3 million. This growth was driven by strong customer expansion and deeper adoption of AI-driven features.
In particular, Snowflake’s net revenue retention rate was 127%, underscoring a continued trend of increased spending within its existing customer base. One highlight was a major global telecom company choosing Snowflake to handle its network performance data, a helpful example of the platform’s overall scalability and reliability. On top of that, Snowflake’s AI tools, like Cortex AI, gained strong traction, which played a big role in driving growth.
Lastly, partnerships and Snowflake’s overall ecosystem strength contributed to momentum. Snowflake’s collaboration with AWS has proven incredibly impressive, as it has delivered $3.9 billion in bookings over the past year, a 68% increase from the prior period. With this strategy of aligning with the primary cloud providers while expanding its existing customer base, Snowflake has cemented its position as a leader in the AI data space. This is the main reason why I align with Wedbush’s viewpoint.
Valuation: A High Price for High Potential
Despite its strengths, Snowflake’s valuation remains a subject of debate. This is not surprising, given that its shares are trading at 15 times FY2025’s expected sales and 231 times projected EPS. These multiples are steep. Nevertheless, they reflect high growth expectations from investors who view Snowflake as a transformative player in the AI-driven economy.
While a bold statement, I do believe that the company’s growth prospects should be able to support this premium. Analysts expect EPS to grow by 42% and 46% in FY2026 and FY2027, which will notably compress the forward P/E ratio. Such a rapid earnings expansion could justify today’s valuation, especially if Snowflake continues to capitalize on AI-related opportunities.
Is SNOW Stock a Buy, According to Analysts?
Wall Street remains quite optimistic about Snowflake’s prospects despite its lofty valuation. Specifically, SNOW stock has a Strong Buy consensus rating based on 24 Buys and six Hold recommendations over the past three months. At $186.60, the average SNOW stock price target implies an upside potential of 15% from its current levels.
For the best guidance on buying and selling SNOW stock, look to Rosenblatt Securities Blair Abernethy. He is the most accurate and profitable analyst covering the stock (on a one-year timeframe), boasting an average return of 22.57% per rating and a success rate of 71%.
Conclusion
In summary, I believe Snowflake appears well-positioned to lead in the ever-transforming AI revolution thanks to its powerful data platform, bolt-on acquisitions, and strong partnerships with industry leaders. Features like Cortex AI and steady financial performance underline its ability to meet the rising demands of enterprises adopting AI. So, while it’s fair to say that the stock’s valuation is high, its growth potential and key role in the AI ecosystem make it an attractive option for long-term investors looking for exposure in the space.
