Snowflake Inc (NYSE:SNOW) saw Bank of America raise its price target on the AI data cloud company ahead of earnings, lifting its target to $205 from $195 as the firm pointed to sustained enterprise demand and early traction in AI-driven workflow tools.
With the company due to report its Q1 results on May 27, Bank of America also reiterated its ‘Buy’ rating and increased its valuation multiple to 10.3x enterprise value to calendar year 2027 estimated revenue from 9.8x previously, citing improved execution confidence.
The analysts said they expect Snowflake to report strong Q1 results, adding that underlying demand conditions for leading AI-enabled data platforms “should continue unabated.”
Bank of America said it is not overly concerned about near-term regional softness, including potential Middle East headwinds, noting that the geography represents only about 1% of Snowflake’s revenue and is therefore unlikely to materially impact results.
A key focus heading into the print will be the magnitude of Snowflake’s product revenue beat versus guidance. The firm highlighted that the beat rate has moderated in recent quarters, declining from 5.1% to 2.7% and then to 2.4%.
The analysts wrote that a repeat of last quarter’s 2.4% beat would still indicate roughly 30% year-over-year product revenue growth, consistent with the prior quarter’s performance. However, any result above that level would suggest an acceleration in growth, which they view as important for FY27 expectations.
“Anything above 2.4% implies Product revenue growth accelerates,” Bank of America wrote, adding that sustained strength at or above that level would reinforce the case for more than 30% product revenue growth in FY27.
The report also pointed to increased investor attention on Cortex Code (CoCo), Snowflake’s AI-native tool designed to help customers build and automate workflows within its platform.
Bank of America said CoCo “could be a stronger-than-expected driver of growth in financial year 2027,” noting that Snowflake has disclosed adoption across roughly 50% of its customer base.
The firm also highlighted early data suggesting 11% higher consumption among CoCo users versus a control group, describing it as a constructive demand indicator. Investors may look for additional details on usage trends and monetization of CoCo during the earnings call, the bank added.
Finally, the analysts addressed Snowflake’s recent chief revenue officer transition, which was announced in March. While the move initially raised execution questions, Bank of America said the appointment of long-time Snowflake executive Jonathan Beaulier should help ensure continuity.
The firm said it will be watching for any changes to go-to-market strategy, including customer focus, product prioritization, and sales organization structure, as management details its approach going forward.
Snowflake shares traded hands at $335 on Tuesday afternoon, down about 20% so far this year.