TD Cowen raises Snowflake stock price target on strong results

TD Cowen raised Snowflake’s price target to $300 from $255 and reiterated a Buy rating, naming it a Top Pick after the company delivered its largest beat in six quarters and highest growth in eight quarters. Snowflake reported 29% revenue growth to $4.68 billion, with product growth accelerating about 400 bps sequentially to 34% and full-year growth guidance lifted roughly 400 bps to around 31%. The firm highlighted CoCo’s February launch and stronger AI-related consumption as evidence that Snowflake’s AI narrative is improving materially.

Analysis

The important signal here is not just multiple target raises; it is that the Street is converging on a new monetization curve for SNOW tied to AI consumption rather than seat growth. That shifts the debate from “can Snowflake defend legacy data warehousing?” to “can it become the control layer for model execution and workflow orchestration,” which carries a much larger implied spend-per-customer trajectory over the next 12-24 months. If that thesis is right, the rerating can continue even if headline revenue growth only stays in the low-30s, because the market will pay for durability of consumption-driven expansion.

The second-order winner is the broader AI infrastructure stack: better Snowflake usage implies more workloads moving from experimental to production, which should benefit adjacent platforms that sit on top of or alongside enterprise data pipes. The relative loser is point-solution data tooling vendors whose value prop weakens if Snowflake absorbs more of the orchestration layer. The key competitive question is whether this AI consumption is incremental demand or just budget reallocation from existing analytics workloads; the former supports a multi-quarter uplift, the latter caps upside once the initial launch effect normalizes.

The main risk is that the recent enthusiasm front-runs a few quarters of execution. With the stock already re-rated and consensus targets moving up together, the setup is vulnerable to any deceleration in product growth or commentary that AI usage is still small versus the core business. A miss on net retention, consumption durability, or large-customer concentration would likely hit the multiple before it hits the P&L, making this a stock that can fall 15-20% quickly on guidance color even if fundamentals remain healthy.

The contrarian view is that the market may be overpaying for a narrative transition that is still early. If CoCo and Cortex-style products are genuinely strategic, the economics may initially be lower-margin than the market assumes due to compute intensity and customer incentives, delaying operating leverage. That creates a cleaner long-term story but a less attractive near-term entry unless we get a post-earnings pullback or a broader AI software de-risking event.

Key Decisions for Investors

• Stay long SNOW into the next 1-2 quarters only on weakness, preferably after a 5-8% pullback; upside is another 10-15% if AI consumption remains sequentially accretive, but upside from here is more multiple-driven than estimate-driven.
• Use SNOW calls rather than stock for event exposure: buy 3-6 month out-of-the-money calls to capture a continued AI rerating while limiting damage if the market questions durability.
• Pair trade: long SNOW / short a slower-growth legacy data infrastructure name or software basket to isolate AI consumption reacceleration versus generic enterprise IT spend.
• If SNOW gaps higher on any AI product commentary, trim 25-33% into strength; the stock is vulnerable to consensus crowding and any hint that AI demand is still early-stage could compress the multiple quickly.
• Monitor the next quarterly disclosure for AI-specific usage metrics and large-customer concentration; if product growth decelerates by more than 300 bps sequentially, consider flipping to a tactical short for a 1-2 month horizon.