Morgan Stanley upgrades this AI play, says stock can jump more than 20%
Artificial intelligence growth could provide a boost to shares of Snowflake , according to Morgan Stanley. The bank upgraded the cloud software maker to overweight from equal weight and increased its price target by $62 to $262 — which reflects more than 22% upside from Monday's close. The rating change comes as the stock has already outperformed the broader market in 2025. Year to date, Snowflake has jumped more than 38%, while the S & P 500 has risen more than 2%. SNOW YTD mountain SNOW, year-to-date "After several years of sharply decelerating growth and mounting investor concerns on its positioning for AI/ML, Snowflake's secular growth prospects have improved under the leadership of CEO Sridhar Ramaswamy," analyst Sanjit Singh wrote in a Tuesday note. "While it is still early in AI/ML and in the application market, infusing AI-based innovation in the core coupled with a rising priority for customers to modernize their data infrastructure as a necessary step to execute on their AI initiatives has resulted into a stabilization in the core data warehousing business," he added. Singh said AI will create a long growth runway in the core data warehousing business and sees market expansion into both data engineering and AI providing a compound annual growth rate of at least 20% through 2030. The analyst also cited other catalysts for gains such as new customer growth and an improving AI portfolio. "We have identified large customers with potential six-figure AI workloads on Snowflake, proving out the product-market fit and making us more confident that Snowflake can hit reported targets of ~$100 million AI run rate by year end, setting up this part of the business to contribute meaningfully in FY27 and beyond," he wrote. Most analysts are bullish on Snowflake. Forty of 50 analysts covering the stock have a strong buy or buy rating, according to LSEG data. The average target of roughly $229 implies more than 7% upside. The stock was almost 2% higher in premarket trading Tuesday following the upgrade.
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