Jun. 24 at 8:37 AM
Morgan Stanley Assumes Coverage on
$SNOW with Overweight Rating, PT
$262; says growth prospects have improved under CEO Sridhar Ramaswamy
Analyst comments: "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 (who took over the role in February 2024). Under his tenure, Snowflake has become a sharper executing organization across sales, go-to market and product engineering which has translated to stabilization in product revenue growth in the high 20's.
In addition, the pace of product innovation at Snowflake has accelerated materially across its 4 major opportunities: 1) core cloud data warehousing, 2) data engineering, 3) AI/ML platforms and 4) applications and collaboration. 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.
Meanwhile, fast-execution on the product roadmap and pricing/packaging changes have led to
$200+ million in revenue run rate in data engineering. Beyond the improved execution, we believe Snowflake has found its identity and has settled on a strategy on how it will successfully capitalize on the
$300+ billion market opportunity – making it easy for customers to bring AI to their structured and unstructured data under a single easy-to-use, highly-secured and governed platform."
Analyst: Sanjit Singh
