Snowflake Jumps 8% Pre-Market After Piper Sander Hikes Price Target To $215, Calls It 'High-Conviction Growth Play' Snowflake Inc. (SNOW) shares experienced a significant surge of 8% in pre-market trading on Thursday, fueled by a substantial increase in its price target from Piper Sandler. This upward movement reflects a strong endorsement of the company’s growth potential and strategic positioning within the data cloud market. Piper Sandler analysts, led by Brent Bracelin, have reiterated their ‘overweight’ rating, elevating the price target to $215 from the previous $175 – representing a noteworthy 20% upside for investors considering a move into Snowflake stock. This bullish outlook is underpinned by what Piper Sandler terms a ‘high-conviction growth play,’ indicating a high degree of confidence in Snowflake’s ability to deliver sustained, robust growth.

The core of Piper Sandler’s thesis revolves around achieving the ‘Rule of 50,’ a key metric often employed to assess a company’s long-term viability and growth prospects. This ambitious target demands 25% annual product revenue growth, coupled with 25% in free cash flow margins, ultimately generating over $4 billion in annual recurring revenue. This ambitious goal demonstrates the analysts’ belief in Snowflake’s continued ability to capture market share and maintain its leadership position in the rapidly expanding data cloud space. The analysts’ conviction is further bolstered by several key developments showcased in Snowflake’s recently released Q1 results, painting a picture of a company executing strongly despite a challenging macroeconomic environment.

Specifically, Snowflake’s Q1 performance exceeded analyst expectations, reporting $1.04 billion in revenue, surpassing consensus estimates of $1.01 billion. Furthermore, the company achieved a profit of $0.24 per share, exceeding predictions of $0.21 per share. This strong execution was highlighted by a 26% year-over-year product growth rate, amounting to a $39 million beat, demonstrating the company’s ability to maintain its impressive growth trajectory even as broader economic uncertainty persists. The analysts emphasized this ‘solid Q1 execution’ as encouraging given the current macroeconomic headwinds, indicating Snowflake’s resilience and strategic advantages.

Beyond the topline numbers, several significant deal wins further strengthened the bullish case. Snowflake secured two $100 million-plus contracts with prominent financial services customers, signaling increasing demand for its cloud-based data solutions within this traditionally conservative sector. Moreover, the company witnessed a substantial uptick in customer adoption of its AI/ML tools, rising to over 5,200 users weekly – a significant increase from the 4,000 users observed in the prior quarter. This growth highlights the increasing relevance and utility of Snowflake’s AI capabilities, a critical factor driving future revenue potential. The analysts also noted that while most other software companies they cover have maintained their annual guidance ‘out of an abundance of caution,’ Snowflake has raised its annual product revenue guidance by $45 million at the midpoint, or 25% year-over-year growth, ahead of the earlier 24% guidance. This proactive approach demonstrates confidence in the company’s ability to exceed expectations.

Looking at the broader market context, Snowflake’s stock has experienced a remarkable recovery, increasing by 27.73% over the past month, rebounding from late-April lows. Year-to-date, the stock has climbed by 13.72%, reflecting investor sentiment and the positive momentum generated by the company’s strong performance. The average consensus Price Target for Snowflake stands at $203.69, representing a 13.7% upside from its current trading level. Despite these positive developments, Benzinga’s Edge Stock Rankings indicate a mixed assessment, with the stock scoring well on Momentum but facing challenges on Growth and Value metrics. However, the favorable price trend across short, medium, and long-term horizons suggests continued investor interest. For deeper insights and comprehensive stock analysis, explore Benzinga’s Edge Stock Rankings. © 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.