Analyst Stephen Bersey nearly doubles his price target on the cloud data company, citing AI monetization momentum and margin expansion.
HSBC analyst Stephen Bersey has upgraded Snowflake from Hold to Buy, lifting his price target from $176 to $289. That’s a 64% bump in the target, which tells you something about how dramatically the narrative around this company has shifted in recent months.
The catalyst is straightforward: Snowflake’s AI products are no longer science experiments. They’re generating real revenue.
The numbers behind the upgrade #
Snowflake’s fiscal Q1 results gave Bersey plenty of ammunition. Product revenue climbed 30% year-over-year, which is solid. But the real eye-catcher was bookings, which surged 42%, a signal that demand isn’t just holding steady but accelerating.
Management was confident enough to raise fiscal 2027 product revenue guidance to approximately 27% growth.
On the profitability front, gross margins hit 71.7% and operating margins reached 10.8%, both exceeding expectations.
Shares responded accordingly, surging over 36% following the earnings release. HSBC wasn’t alone in its enthusiasm. Analysts from Bank of America and Cantor also raised their price targets in response to the results.
AI adoption is the engine #
The company’s AI-related accounts have grown to around 9,100. Its Cortex AI platform, which lets customers build and run AI models directly within Snowflake’s data cloud, has moved from pilot phase to production deployment.
Then there’s Snowflake Intelligence, the company’s agentic AI service. The customer base for that product has nearly doubled to 2,500.
The upgrade also specifically cites CoCo adoption. That’s Snowflake’s consumption credit model, which essentially lets customers pre-commit spending in exchange for better pricing. Growing CoCo adoption is bullish because it signals that customers see Snowflake as infrastructure they’ll be using for the long haul, not a tool they’re evaluating quarter to quarter.
What this means for investors #
The risk side of the equation deserves attention. Snowflake operates in a market where hyperscalers like Amazon, Google, and Microsoft all have competing offerings. AWS has Redshift, Google has BigQuery, and Microsoft has Fabric. These aren’t minor competitors. They’re the companies that also provide the underlying cloud infrastructure Snowflake runs on.
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