Snowflake Inc. (NYSE: SNOW) stock jumped 3% in pre-market trading Tuesday after Wolfe Research upgraded its stock rating to Outperform from Peer Perform, setting a new price target of $235.00.
The upgrade follows a positive shift in Snowflake’s performance, with Wolfe Research citing improved core consumption trends, a more favorable competitive environment with hyperscalers, and stronger product momentum. These factors are expected to drive significant revenue growth for the company.
Wolfe Research analyst Alex Zukin highlighted the turnaround in Snowflake’s performance since the firm last downgraded the stock nearly two years ago. At the time, Snowflake (NYSE: SNOW) was struggling with declining consumption trends, increased competition, and stagnating product momentum. Zukin believes the recent improvements in these areas now position the company for a more optimistic financial future.
With a market capitalization of $61.9 billion and revenue growth of 30.3% over the last 12 months, Snowflake’s transformation is evident in its financial performance. Wolfe Research points to a solid fourth quarter, showing growth of approximately 28%, and forecasts 23% year-over-year growth in fiscal year 2026 product revenue.
Wolfe Research’s upgrade is based on the stabilization and improvement of Snowflake’s consumption trends, which have gained momentum in recent quarters. The firm’s analysts predict continued strong growth, especially in 2025, as Snowflake is expected to benefit from the enterprise AI trend.
Analysts also see a product-focused leadership team as a key factor in driving increased demand for Snowflake’s Data Engineering products, including Snowpark, Dynamic Tables, Cortex, Polaris, and Streaming.
Despite its current premium valuation, Snowflake’s impressive financial metrics—such as a 67.3% gross profit margin and strong liquidity—suggest the company is well-positioned for future growth. Wolfe Research believes that Snowflake’s strategic initiatives will help it sustain one of the highest top-line growth rates in its coverage.
As a result of these positive trends, Snowflake’s stock is expected to continue benefiting, reflecting a brighter outlook for the company’s financial trajectory.
