1. Snowflake Inc. (NYSE:SNOW)
Number of Hedge Fund Holders: 71
Snowflake Inc. (NYSE:SNOW) is a leading cloud-based data platform provider that uses AI to enhance its services. It utilizes AI for data management optimization, advanced insights, data security, data engineering automation, and data science capabilities.
With over 1,000 deployed use cases and 3,200 accounts leveraging AI and ML features, the company is solidifying its position as a leader in data and AI. The focus on interoperability and data transformation has proven to be a significant differentiator, with these features generating over $200 million in annual run rate. Partnerships with industry giants like Microsoft and ServiceNow further enhance data interoperability and accelerate application development.
AI is poised to revolutionize data consumption, making structured and unstructured data more interchangeable and influencing areas like business intelligence. The company’s comprehensive product suite, including Cortex AI, a platform that uses AI to provide business insights, automate tasks, and build AI-powered applications, positions it as the preferred data platform for enterprises.
Baron Global Advantage Fund stated the following regarding Snowflake Inc. (NYSE:SNOW) in its Q3 2024 investor letter:
“Snowflake Inc. (NYSE:SNOW) is a leading cloud data platform predominantly used for data analytics. Shares fell 15.2% in the third quarter due to a cybersecurity incident, a shifting competitive landscape, a change in leadership, and general macro complexities which are pressuring customer IT budgets. With generative AI (Gen AI) front and center, both investors and customers are closely evaluating Snowflake’s positioning in the future data ecosystem. Databricks and other competitors whose core users are data scientists who are also key buyers of Gen AI technologies, are benefiting. In addition, while Snowflake’s product innovation push should fuel future growth, it may also lead to short-term headwinds to profitability. Management reported healthy demand for its core data analytics, evidenced by solid growth rates among current customers alongside new go-to-market initiatives that could support growth. We are optimistic the new CEO, Sridhar Ramaswamy, can lead the company towards an AI-centric strategy, and therefore remain shareholders.”
As we acknowledge the growth potential of Snowflake Inc. (NYSE:SNOW), our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than SNOW but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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