Snowflake rival Databricks on Wednesday acquired database startup Neon in a $1 billion deal as the software companies battle in the enterprise market and companies ramp up artificial intelligence projects. Snowflake stock gained despite Databricks' Neon acquisition.
Snowflake sells data analytics software that runs on cloud-computing platforms. Also, the company has evolved into a cloud data-management software provider.
Privately-held Databricks has emerged as Snowflake's biggest rival. Many companies are in trials with autonomous, goal-driven AI agents. Snowflake and Databricks are focused on helping companies use proprietary data to deploy their own AI agents.
Snowflake Stock: Earnings Due May 21
Raymond James analyst Simon Leopold in a report said the Neon deal will give Databricks a boost versus Snowflake.
"The acquisition positions Databricks to better address enterprise AI applications by allowing organizations to quickly and easily connect their existing data to build new AI bots and agents," said Leopold. "With Neon bundled into Databricks' Lakehouse, customers gain a one-stop shop for both analytics and low-latency transactions."
On the stock market today, Snowflake climbed a fraction to 181.91. Also, Snowflake stock has gained 18% in 2025.
First quarter earnings for Snowflake stock are due May 21. Meanwhile, Snowflake will host an analyst day coinciding with its Summit customer conference the first week of June.
Neon's platform is based on the popular open-source database PostgreSQL, a relational database that dates back to the late 1980s.
The Neon deal follows Databricks' $1.3 billion purchase of MosaicML in 2023 and its $1 billion acquisition of Tabular last year, Leopold noted. Here's a look at well-funded Databrick's strategy versus Snowflake.
Also, Snowflake owns a Composite Rating of 85 out of a best-possible 99, according to IBD Stock Checkup.
Follow Reinhardt Krause on X, formerly Twitter, @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
