Snowflake stock price target raised to $285 from $250 at UBS on strong data cycle

Snowflake Inc. reported robust second-quarter results, significantly exceeding revenue and EPS expectations, with product revenue growth accelerating to 32%. This strong performance prompted UBS to raise its price target to $285 while maintaining a Buy rating, a sentiment echoed by other firms like Oppenheimer, Mizuho, Truist, and Jefferies, which also increased their targets. The company's strong third-quarter guidance of 30-31% growth and its momentum within a robust data software investment cycle underpin analyst confidence, despite current high valuation multiples.

Analysis

Snowflake Inc. reported a robust fiscal second-quarter 2025, significantly outperforming market expectations on both top and bottom lines. The company posted earnings per share of $0.38 against a forecast of $0.27 and revenue of $1.14 billion versus the anticipated $1.09 billion. A key metric, product revenue growth, accelerated by 5 points sequentially to 32%, beating the guided range of 29-30%. This strong performance, combined with guidance for continued 30-31% growth in the third quarter, has prompted a series of upward price target revisions from analyst firms including UBS, Oppenheimer, Mizuho, Truist, and Jefferies. The bullish sentiment is further supported by a view that Snowflake is benefiting from a 'robust data software investment cycle,' as evidenced by strong results from peers like MongoDB and Palantir. Despite this operational momentum and positive analyst sentiment, the company's valuation remains a point of concern, with shares trading at high forward multiples of 13.9 times calendar year 2026 estimated revenue and 54 times free cash flow.

Key Decisions for Investors

• Given the significant revenue acceleration, strong earnings beat, and positive analyst revisions, growth-oriented investors may view the results as a validation of the company's long-term thesis, justifying its premium valuation.
• Investors should weigh the strong operational momentum against the demanding valuation, as the high multiples suggest significant growth is already priced in, leaving the stock vulnerable to pullbacks on any future signs of deceleration.
• It is prudent to monitor the performance of industry peers such as MongoDB and Databricks, as their results serve as a key indicator for the health and durability of the data software investment cycle that currently underpins Snowflake's growth narrative.