Snowflake Analyst Remains Bullish Ahead Of Q2 Earnings Release

Snowflake Inc SNOW is scheduled to report its fiscal second-quarter results on Wednesday.

Of the 27 data points collected on the company, 85% are positive this quarter versus 50% in the previous quarter, according to Citizens JMP Securities.

The Snowflake Analyst: Analyst Patrick Walravens reiterated a Market Outperform rating and price target of $260.

The Snowflake Thesis: Snowflake guided to product revenue growth of 25% for the quarter, representing a sequential deceleration from 26%, which requires "only a 2% beat to drive acceleration compared to the 5% beat last quarter," Walravens said in the note.

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A report published by the MIT Networked Agents and Decentralized AI (NANDA) initiative suggests that there is widespread adoption of tools like ChatGPT and Microsoft Copilot, but "even more widespread (95%) failure to achieve measurable P&L impact," the analyst wrote. This is mainly because most GenAI systems do not learn, he added.

The company addresses a huge opportunity that is expected to more than double to $355 billion in 2029, from $170 billion in 2024 and the TAM (total addressable market) is large enough for both Snowflake and its rival Databricks, Walravens further stated.

SNOW Price Action: Shares of Snowflake is flat at $194.50 at the time of publication on Tuesday.