Snowflake Just Hired 500 Sellers—Is This The Start Of A Full-Scale AI Land Grab?

JPMorgan analyst Mark R Murphy reiterated an Overweight rating on Snowflake SNOW with a price target of $225 on Wednesday.

Murphy attended Snowflake’s Investor Day presentation in San Francisco, in conjunction with its annual Summit conference. Snowflake’s Investor Day presentation primarily focuses on its product and technology roadmap as it lays out an expansive strategic vision for the data cloud in the era of AI, the analyst said.

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A financial section was absent from the Investor Day presentation, an understandable dynamic as Snowflake continues its process to select a new CFO after current CFO Mike Scarpelli‘s planned retirement, he said.

Despite the lack of explicit financial guidance or macro-demand update, Murphy noted Snowflake is striking a confident tone overall as it begins to realize benefits from the product, go-to-market (GTM), and other operational initiatives it has undertaken or accelerated since Sridhar Ramaswamy was elevated to CEO in February 2024.

Net-net, the analyst came away incrementally positive following the Investor Day and the relatively upbeat nature of his conversations thus far with partners and customers regarding Snowflake.

Recently-appointed CRO Mike Gannon provided an overview of Snowflake’s Go-To-Market organization and stated that Snowflake hired over 500 sales and marketing folks in the first quarter. While the 500 additional S&M heads is a gross figure, Murphy noted the hiring scale is notable, particularly as hiring activity across many other software companies has been relatively more muted, and likely reflects the opportunity Snowflake is seeing in the market.

Snowflake discussed ongoing industry adoption of the Iceberg data formats, noting that open data table formats like Iceberg make it easier for customers to switch between different data processing engines. As a result, the analyst noted that Snowflake said that customers will move toward the data platforms that offer the most value.

For Snowflake, Iceberg is experiencing a dynamic wherein the tailwinds and opportunity it provides “far exceed and outpace the potential headwinds,” he said.

When asked about its view on more and more SaaS companies moving into the data layer, Murphy said that Snowflake suggested that this move is driven by AI as the rise of Agents is potentially impacting the traditional SaaS model.

However, Snowflake noted that it has a bidirectional data-sharing dynamic with many leading SaaS companies and that the relationships are mutually beneficial.

Snowflake built on its vision of the AI Data Cloud through a series of product unveilings. These announcements included Openflow, Gen2, Adaptive Compute, Intelligence, Snowflake Data Science Agent, and Cortex AISQL.

Murphy is encouraged by Snowflake’s slate of new products and the recent increased pace of innovation.

In the long term, the analyst noted that Snowflake is benefiting from demonstrable secular tailwinds, supported both qualitatively and quantitatively by his CIO Survey and partner checks. He continues to be impressed by the company’s accelerated pace of product innovation, including around AI/ML.

Murphy noted favorable competitive positioning in the longer term as the data layer increasingly gains control over AI.

The analyst projected second-quarter revenue of $1.08 billion and adjusted EPS of $0.25.

Price Action: SNOW stock is trading higher by 1% to $211.24 at last check Wednesday.

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