Bank of America has doubled down on Snowflake, reaffirming a Buy recommendation and identifying the company as a top pick within infrastructure software. In a note to clients, analyst Koji Ikeda argued that Snowflake - the AI-focused data cloud vendor - is well positioned to capture accelerating demand from enterprises for data analytics and artificial intelligence.
BofA framed the central question facing investors as whether Snowflake can maintain product revenue growth in the "high 20%s Y/Y" or even reaccelerate into the 30s. The firm said that outcome is "well within reach," pointing to an expanding product set, AI-driven tailwinds and increasing customer spending as the drivers that could sustain or lift growth.
"The blizzard is just starting to form on broad AI adoption, and we think Snowflake will play a foundational role," Ikeda wrote. BofA expects Snowflake's revenue trajectory to remain among the strongest in infrastructure software - outpacing peers that are growing at roughly 10 percent.
Reflecting its updated view on Snowflake's prospects, the bank raised its price target for the stock to $275. BofA said it revised its valuation methodology "for our updated view on growth, risks, peer multiple compression."
The note emphasized Snowflake's positioning as "fast becoming the king of enterprise data in the cloud," citing the company's OLAP data lakehouse architecture that allows customers to scale compute and storage flexibly to deliver faster results with cost efficiency.
BofA acknowledged that Snowflake shares are not inexpensive, noting the stock trades at a "123% premium" to peers. Nevertheless, the bank argued the premium is justified, asserting that on a growth-adjusted basis the shares trade at the same multiple as peers.
Taken together, BofA's recommendation rests on a combination of product breadth, favorable tailwinds from AI adoption, and stronger customer spend that the bank believes will keep Snowflake's revenue momentum at a top-tier level within the infrastructure software segment.
What this means for markets
- Infrastructure software and cloud infrastructure stocks could see increased investor interest if Snowflake sustains above-peer growth.
- Enterprise IT budgets for data analytics and AI initiatives are a key demand driver for vendors in this sector.