We recently published a list of 12 Best Enterprise Software Stocks to Buy Now. In this article, we are going to take a look at where Snowflake Inc. (NYSE:SNOW) stands against other best enterprise software stocks to buy now.
In 2024, the global enterprise market size was estimated at $263.79 billion, according to Grand View Research. It’s expected to now grow at a CAGR of 12.1% from 2025 to 2030, due to the increasing demand for automated and integrated solutions. Enterprise software becomes more desirable as organizations seek reduced reliance on HR to eliminate manual errors and automate routine tasks. Therefore, ERP (enterprise resource planning), CRM (customer relationship management), and data analytics software are becoming increasingly popular.
Enterprise software is actively transforming with the integration of AI technologies, which changes how it’s designed, deployed, and utilized. According to Endava, GenAI is driving this transformation by incorporating creative and analytical capabilities into enterprise applications. This enables software to undergo intelligent tasks like generating reports, creating personalized training materials, and writing codes. AI not only automates manual jobs but also allows hyper-personalization of customer-facing enterprise software. This allows platforms like CRM and e-commerce to deliver targeted content and recommendations, which leads to higher customer satisfaction and improved sales. This is fueled by adaptive AI-enhanced enterprise software that learns from vast datasets to provide real-time and individualized interactions.
AI-driven automation is also becoming more popular in core business processes. ERP and workflow management systems are automating complex tasks and reducing manual intervention to improve overall efficiency. Enterprises are streamlining operations and making data-driven solutions through the integration of now-standard features like process mining, intelligent document processing, and predictive analytics. Agentic AI is further pushing enterprise software towards greater autonomy. These are AI systems that act like human agents and autonomously perceive, reason, and analyze data to achieve certain goals. As enterprise software continues to integrate advanced AI capabilities in its regular applications, the technology becomes more proactive and intelligent.
Our Methodology
We sifted through ETFs and financial media reports to compile a list of the top enterprise software stocks. We then selected the 12 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A software engineer at work, surrounded by a wall of computer monitors connected to a ‘Data Cloud’ platform.
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.”
Overall, SNOW ranks 4th on our list of best enterprise software stocks to buy now. While we acknowledge the growth potential of SNOW, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. 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 this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
