Snowflake Poised to Maintain High Product Revenue Growth, BofA Says

MT Newswires Live01-31

Snowflake (SNOW) is BofA Securities' top infrastructure software pick for 2026, with the firm highlighting the company's central role in enabling enterprise AI adoption and advanced data analytics, according to a Friday note.

The brokerage acknowledged investor debate over Snowflake's ability to sustain high-20% product revenue growth or reaccelerate to 30% plus, which could be within reach if the company expands its product offerings to boost customer spending.

BofA slightly reduced its outlook, lowering its 2027 revenue forecast to $5.78 billion and 2028 to $7.11 billion, from a prior $5.86 billion and $7.41 billion respectively. Free cash flow estimates for 2027 and 2028, were also lowered to $1.47 billion and $1.85 billion, from $1.58 billion and $2.05 billion, respectively.

Analysts surveyed by FactSet expect revenue of $5.79 billion for 2027 and $7.14 billion for 2028.

BofA's new price target reflects a 17.6x enterprise value to CY 2026 revenue multiple, with the firm arguing Snowflake's valuation premium is justified on a growth-adjusted basis and supported by strong revenue growth and expanding free cash flow margins.

According to BofA, rising competition from hyperscalers and Databricks could pressure pricing, given Snowflake's reliance on cloud partners that are also competitors.

The firm maintained its buy rating on the stock and lowered its price target to $275 from $310.

Price: 199.49, Change: +0.15, Percent Change: +0.08

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