Snowflake’s Price Target Cut at KeyBanc

KeyBanc analysts reduced their price target for Snowflake (NYSE:SNOW) to $168 from $200 while maintaining an Overweight rating on the stock.

The analysts provided insights following Snowflake's 2024 investor day and the Data Cloud Summit user conference. They expressed increased optimism about the accelerated pace of product innovation, the user-friendly nature of Snowflake's platform, and its strong collaborative and development ecosystem. Conversations with customers about the iceberg feature were promising, though it's too early to determine its net impact on storage revenue and workloads versus new workloads added to the platform.

The analysts noted positive takeaways from the investor session, particularly the potential upside from new products like Cortex, expected to contribute meaningfully in fiscal 2025 despite not being included in current guidance. However, they felt the investor day lacked customer testimonials regarding new product adoption, Snowflake's strategic position in AI, and how iceberg drives incremental workloads. Additionally, they sought clearer explanations from management on why Snowflake will be the preferred platform for AI workloads.

The analysts said they will keep an eye on competitive developments, particularly Databricks' acquisition of Tabular for managed iceberg and its upcoming Data + AI Summit.