4. Snowflake Inc. (NYSE:SNOW)
Number of Hedge Fund Holders: 85
Snowflake Inc. (NYSE:SNOW) offers a cloud-based data platform for various organizations globally. Its platform includes AI Data Cloud, which enables customers to consolidate data into a single source. It serves many industries, such as financial services, media and entertainment, retail, healthcare, and technology along with the public sector.
The company’s enterprise software segment is centered around its Data Cloud platform which enables customers to integrate and analyze data conveniently. It essentially facilitates data sharing and collaboration. In Q4 2024, the product revenue for this segment increased by 28% year-over-year. For the full fiscal year, it improved by 30%. The company is now focusing on expanding its Data Cloud capabilities. For instance, it released 400+ new product capabilities in 2024, which was 2x from 2023.
The company’s AI platform Cortex AI exemplifies this expansion. It allows customers to build data agents and use LLMs from providers like Anthropic, Meta, DeepSeek, and OpenAI. On February 20, BTIG analyst Gray Powell upgraded the stock to a Buy rating with a $220 price target due to its increasing AI workloads and expanding AI projects. Powell anticipates that the company will outperform because of its position in the cloud data analytics market, its growing GenAI product portfolio, and its partnerships with tech and AI companies.
Burke Wealth Management believes that Snowflake Inc. (NYSE:SNOW) is crucial for enterprises that are implementing AI solutions. It stated the following in its Q4 2024 investor letter:
“Snowflake Inc. (NYSE:SNOW): Chapter two of the Prodigal Son Returns features Snowflake. Snowflake’s return to the portfolio required some tangible progress on the product innovation front as well as an uptick in business momentum before I was ready to slaughter the proverbial fattened calf. To review, we sold our stake in Snowflake following its fourth quarter 2023 earnings release in which legendary CEO Frank Slootman announced his retirement and 2024 guidance came in significantly below expectations. While new CEO Sridhar Ramaswamy has an excellent reputation as an innovator in the technology sector, we needed to see some tangible signs of progress on that front as well as a stabilization in the core data analytics business before repurchasing the stock. That is what we got with the release of third quarter earnings. Consumption trends in the core business have stabilized and are improving while there are several exciting new product offerings around AI that have been added to the platform. We were early to Snowflake when we made our initial purchase in the summer of 2023. We subscribed to the belief that any companies seeking to implement AI solutions in their business will first need to make sure their data is both accessible and secure, which would drive tremendous demand for Snowflake’s platform. We still do. As we discussed in the agentic age portion of this letter, sometimes the path from installing the data center compute power necessary for generative AI and arrival of the applications necessary to unlock the productivity promises is not always straight. That said, while the path may be winding we remain confident in the ultimate destination. We think Snowflake is going to be a big player in helping enterprises get their data accessible and safely delivering AI solutions to that data, whether it be their own or from trusted partners, that will drive the productivity enhancing business insights that are the reasons for the hundreds of billions of dollars being invested in artificial intelligence.”
