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Snowflake (SNOW) Stock Trades Up, Here Is Why

ⓘ This article is third-party content and does not represent the views of this site. We make no guarantees regarding its accuracy or completeness.

SNOW Cover Image

What Happened?

Shares of cloud data platform provider Snowflake (NYSE: SNOW) jumped 6.4% in the afternoon session after UBS raised its price target for the company to $310 from $285 while keeping a 'Buy' rating on the stock. 

The new price target represented an 8.77% increase and pointed to a positive outlook for the cloud-based data company's market position. This analyst action occurred as the stock reached a new 52-week high, which underscored strong investor confidence. Other recent positive developments for the company included the launch of Cortex AI, a suite of artificial intelligence tools aimed at the financial services sector, and plans to expand its presence in New Zealand through Amazon Web Services.

Is now the time to buy Snowflake? Access our full analysis report here.

What Is The Market Telling Us

Snowflake’s shares are quite volatile and have had 16 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 1 day ago when the stock dropped 4.3% on the news that tech stocks pulled back as a report raised concerns about artificial intelligence demand and profitability. 

Oracle shares lost more than 5% following news of its cloud business generating lighter margins than expected. According to internal documents cited in the report, the gross profit margin for this business was only 14%, a figure much lower than what analysts had expected. This suggested that the high costs of running the advanced chip infrastructure were weighing on profitability. Compounding these worries was the ongoing U.S. government shutdown, in its second week, with no clear resolution in sight from Washington. These updates drove investors away from riskier assets and towards safe havens, a trend highlighted by gold futures hitting a record $4,000 per ounce for the first time.

Snowflake is up 58.4% since the beginning of the year, and at $249.70 per share, has set a new 52-week high. Investors who bought $1,000 worth of Snowflake’s shares 5 years ago would now be looking at an investment worth $1,039.

Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.

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