Snowflake is the IBD Stock of the Day as the enterprise software maker continues to flourish under a new chief executive who's driving its artificial intelligence game plan. Snowflake stock has gained 44% in 2025, outperforming most software peers, including big-cap Salesforce and ServiceNow.
Snowflake sells data analytics software that runs on cloud-computing platforms. Also, the company has evolved into a cloud data-management software provider. It faces stiff competition from privately-held Databricks.
On the stock market today, Snowflake stock rose 1.5% to close at 223.50.
From a technical point of view, Snowflake has found support at both its 21-day and 50-day moving averages. The stock is in a buy zone as it rebounds from those levels of support. Investors could have used 222.30 and 226.60 as alternate entry points.
In early 2024 Snowflake brought in Sridhar Ramaswamy as its new chief executive officer. Ramaswamy had been a Snowflake senior vice president after it acquired AI startup Neeva, which Ramaswamy founded. Earlier, Ramaswamy ran Google-parent Alphabet's digital advertising business.
Snowflake Stock: Faster AI Innovation
After several years of sharply decelerating growth and mounting investor concerns about its positioning for AI, Snowflake's secular growth prospects have improved, said Morgan Stanley analyst Sanjit Singh in a June report.
"Under Ramaswamy, Snowflake has become a sharper executing organization across sales, go-to market and product engineering which has translated to stabilization in product revenue growth in the high 20s. In addition, the pace of product innovation at Snowflake has accelerated materially."
Snowflake, Databricks and Palantir Technologies are focused on helping companies use proprietary data to customize artificial intelligence applications. Many companies are in trials with autonomous, goal-driven "AI agents."
In blogs and elsewhere, Ramaswamy has pounded home a simple message: "There is no AI strategy without a data strategy."
Industry-specific versions of generative AI are expected to use company data to train AI models.
Snowflake Q1 Earnings Beat
Snowflake reported first quarter earnings of 24 cents per share, up 71% from a year earlier, topping estimates of 21 cents. Revenue climbed 26% to $1 billion, in-line with Wall Street targets.
For the second quarter, Snowflake forecast product revenue in a range of $1.035 billion to $1.04 billion vs. consensus estimates for $1.022 billion.
Both Snowflake and Databricks have been on acquisition sprees. In its latest deal, Snowflake in June acquired database startup Crunchy Data.
During an investor day in June, Snowflake updated its product strategy but did not provide new, long-term financial targets. William Blair analyst Jason Ader came away upbeat.
Ramaswamy: Go-To-Market Focus
"Overall, the investor day illustrated meaningful progress in CEO Ramaswamy's vision of becoming the central nervous system in the cloud for an enterprise's data needs, with its unified platform and diverse product portfolio addressing an expanding set of use-cases," Ader said.
Snowflake customers can share data with their partners across multiple online storage systems using the company's data warehouse. In addition, the company enables applications to easily share searchable data.
RBC Capital analyst Matthew Hedberg said in a recent report: "The focus of CEO Ramaswamy is on both product innovation and go-to-market improvements. While his focus is certainly on product given his background at Google and Neeva, he's been equally focused on go-to-market selling to both data analysts and data scientists as well as expanding partner initiatives. On the product side, the company's focus is to create the easiest-to-use and most cost-effective cloud enterprise data platform for AI."
Open Source Iceberg A Problem?
However, open source data storage technologies such as Apache Iceberg could present a problem for Snowflake, Databricks and similar companies, some analysts say.
Snowflake and other software companies store customer data in proprietary platforms. It's difficult for customers to switch software firms. Iceberg enables organizations to store their data in open, standardized formats.
Founded in 2012, Snowflake pulled off the largest initial public offering ever by a software company in September 2020, raising $3.4 billion. But Snowflake stock swooned in 2022 as analysts questioned its lofty valuation amid decelerating revenue growth.
Software maker Figma, a one-time acquisition target of Adobe Systems, launched a big IPO on Thursday. But Snowflake will still hold bragging rights to the biggest software IPO ever.
Snowflake Stock: Technical Ratings
Meanwhile, SNOW stock holds an IBD Composite Rating of 95, according to IBD Stock Checkup.
IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
Further, Snowflake stock has an Accumulation/Distribution Rating of B. That rating analyzes price and volume changes in a stock over the past 13 weeks of trading. Its current rating indicates more funds are buying than selling.
Follow Reinhardt Krause on X, formerly called Twitter, @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
