8. Snowflake Inc. (NYSE:SNOW)
Number of Hedge Fund Investors In Q1 2024: 73
YTD Return: -36.1%
Snowflake Inc. (NYSE:SNOW) is mid sized SaaS company that enables businesses to consolidate their data under a single platform and run analytics and other operations. The firm has had a busy June when it comes to AI as it announced a slew of deals. One of these will see Snowflake Inc. (NYSE:SNOW) partner up with AI giant NVIDIA to enable customers to build custom AI applications on Snowflake Inc. (NYSE:SNOW)’s platforms by using NVIDIA’s AI capabilities. These announcements came after the firm’s latest earnings which saw it miss analyst adjusted EPS estimates of $0.18 by posting $0.14 in the segment. Citi’s latest analyst note saw it maintain a Buy rating on Snowflake Inc. (NYSE:SNOW)’s shares along with a $236 share price target. The confidence followed Snowflake Inc. (NYSE:SNOW)’s latest Summit where it announced partnerships with more than a dozen customers.
The average of 37 one year analyst share price targets for Snowflake Inc. (NYSE:SNOW) is $209.97, marking a 65% upside over the recent closing price of $127.17. Its three year average annualized growth rate is 67.98%. Its CEO talked quite a bit about AI during the latest earnings call where he shared:
“What is resonating most with our customers is that we are bringing differentiation to the market. Snowflake delivers enterprise AI that is easy, efficient, and trusted. We’ve seen an impressive ramp in Cortex AI customer adoption since going generally available. As of last week, over 750 customers are using these capabilities. Cortex can increase productivity by reducing time consuming tasks. For example, Sigma Computing uses Cortex language models to summarize and categorize customer communications from their CRM. In the quarter, we also announced Arctic, our own language model. Arctic outperformed leading open models such as LLaMA-2-70B and Mixtral 8x7B in various benchmarks. We developed Arctic in less than three months at one-eighth the training cost of peer models.
AI is a bridge between structured and unstructured data. We see this with Document AI, customers find value in extracting features on the fly from piles of documents. We’re making meaningful progress on Snowpark Container Services being generally available in the second half of the year, and dozens of partners are already building solutions that will leverage container services to serve their end customers. We view Snowpark and other new features as our emerging businesses. These are in the early days of revenue contribution, but we’re seeing very healthy demand. More than 50% of customers are using Snowpark as of Q1. Revenue from Snowpark is driven by spark migrations. In Q1, we began the process of migrating several large Global 2,000 customers to Snowpark.”
