Analysts from Truist Financial and KeyBanc have lowered price targets for Snowflake due to competitive shifts and softening enterprise software budgets.
Despite challenges, the data cloud company shows strong AI adoption and is positioned in a rapidly growing AI software market, projected to reach nearly $995.50 billion by 2030.
Concerns include a moderated enterprise software budget outlook for 2026 and weakened U.S. federal results, impacting Snowflake's full-year outlook.
Snowflake (NYSE: SNOW) is a data cloud company that helps businesses store and analyze large amounts of data. It operates in the rapidly expanding Artificial Intelligence (AI) software market. The company currently has a market capitalization, which is the total value of all its shares, of approximately $48.75 billion.
An analyst from Truist Financial has lowered their price target for Snowflake to $125, down from a previous target of $175. A price target is an analyst's projection of a stock's future price. At the time of the announcement, the stock was trading at $141.36 per share.
This sentiment is shared by other analysts. KeyBanc also trimmed its price target for Snowflake to $200 from $235, citing a shifting competitive landscape with the rise of new AI-native rivals. Despite the reduction, KeyBanc maintains an Overweight rating, suggesting they still see potential in the stock.
The concerns are partly based on a survey showing a softening in enterprise software budgets. The outlook for 2026 has moderated to 3% growth from 5% in the previous quarter. Weakened U.S. federal results and a lower full-year outlook for Snowflake also add to the uncertainty.
Despite these challenges, Snowflake shows significant progress in the AI sector. As highlighted by Zacks, the AI software market is projected to grow to nearly $995.50 billion by 2030. The company's own AI adoption has increased to 9,100 accounts, with product revenues forecasted to be near $5.66 billion for fiscal 2027.
