Needham analyst Mike Cikos reiterated a Buy rating on Snowflake Inc
GenAI is expected to accelerate Software development for Snowflake - involving a greater amount of code to be stored and queried, notes the analyst.
In fact, management expects the volume of newly created code to be executed more often.
The analyst thinks Snowflake is building out the use case for Data Engineers, which makes it a better head-to-head competitor versus private company Databricks.
Cikos also notes Snowflake is disrupting a massive market with its Cloud-Native Data Platform.
The analyst adds that the initial use case, where Snowflake provides material customer value, is as a Cloud-based Data Warehouse. There are tailwinds to growth in this primary use case, from which the analyst believes Snowflake is just starting to benefit.
This apart, Snowflake is undertaking a meaningful expansion of the number of use cases to go well beyond a "Data Warehouse" in pursuit of its vision of becoming a "Data Cloud," the analyst adds.
Meanwhile, Data-Sharing generates substantial customer value and creates customer stickiness, improving retention over the long term, Cikos notes.
Based on the above, the analyst anticipates FY24 revenues to raise 32.5% Y/Y to $2.737 billion.
For FY25, the analyst sees revenues of $3.415 billion, up 24.7% Y/Y.
Price Action: SNOW shares are trading higher by 0.58% to $157.99 on the last check Tuesday.
