UBS upgrades Snowflake on signs of sustained data infrastructure investment

Investing.com -- UBS upgraded Snowflake Inc (NYSE: SNOW) to "Buy" from "Neutral" saying the data software company is poised to benefit from a multi-year wave of enterprise investment in data infrastructure fuelled by artificial intelligence adoption.

UBS also pointed to improving customer sentiment and Snowflake’s product expansion beyond its core data warehouse offering.

“Snowflake has executed better than we imagined,” analysts wrote, adding that competition with Databricks appears manageable.

The brokerage said recent industry checks, including from Snowflake’s annual Summit, suggest companies are increasingly spending to make their data “AI-ready,” which supports broader demand for platforms like Snowflake, Palantir (NASDAQ: PLTR) and Databricks.

Shares of Snowflake are up 35% so far this year, but UBS said the stock’s 19% gain over the past two years and a recent acceleration in performance suggest it’s not too late to buy.

"We conclude that it’s not too late to get more constructive and we upgrade Snowflake shares to a Buy from a Neutral," analysts at UBS said.

UBS raised its price target to $265 from $210, citing strong software spending trends and the potential for Snowflake’s growth rate to approach 30% exiting 2025.

It now values the company at 17 times estimated 2026 revenue, a premium to peers.

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