Not every AI stock is blasting off to new highs, and that’s good news for growth investors who are looking to land relative value in the space. At this juncture, Snowflake (NYSE:SNOW | SNOW Price Prediction) stands out as an AI stock that’s still a country mile away from its all-time highs, still off around 45% from its late-2021 heights.
Though it’s been a painful slog for shares of the data warehousing firm, it hit rock bottom way back in 2022. And while shares have been on a nice recovery, gaining close to 38% year to date, it still seems like much of Wall Street is underestimating the data cloud play as the AI boom provides a much-needed boost to the growth rates of software and infrastructure firms that are supporting the AI revolution in their own unique ways.
With newfound momentum in SNOW stock to get behind, an AI-focused top boss, Sridhar Ramaswamy, that Wall Street has warmed up to in recent months, and an expanding portfolio of AI solutions, I find Snowflake to be a relative bargain that may just get the growth jolt it needs going into the back half of 2025.
Snowflake is ready for an enterprise data revolution
Snowflake is a far more AI-ready company today than it was when Ramaswamy took over from former CEO Frank Slootman. Under Ramaswamy, the company’s AI ecosystem has expanded significantly, with smartly-timed acquisitions (think Crunchy Data and Datavolo) and organic innovations (Snowflake Intelligence and its enterprise-grade Arctic LLM) added to the arsenal.
Though it’s tough to time when Snowflake’s sales will experience an inflection point (could more than 30% growth be up ahead?), I do think it’s tough to ignore the magnitude of product demand that could be in the cards in the next few years. Jefferies analyst Brent Thill thinks that the inflection point could happen at some point this year.
Perhaps Benoit Dageville, co-founder and president of Product, put it best: Companies that don’t embed AI into workflows will run the risk of falling behind.
The next step likely involves integrating AI across all aspects of the business. And with that, such firms will need a reliable data platform to build off of. This is a real opportunity for Snowflake, as companies seek a solid data foundation to enable AI-driven automation and next-level operational efficiencies.
After the lowest-hanging fruit has been plucked by AI, firms are going to need to get serious about their data strategies to get optimal results. In many ways, Snowflake stands out as a one-stop shop for enterprises looking to discover the full extent of the possibilities.
According to RBC Capital, Snowflake is poised to benefit from “improved demand trends,” thanks in part to its new AI-driven products. As more firms strive to stay ahead by embracing the new wave of AI products, they’ll stand to be locked into the Snowflake ecosystem.
It’s also ready for the rise of AI agents
Snowflake isn’t just a data cloud company or a top AI enabler; it’s ready for the agentic AI age with a slew of products that can hit the ground running. Cortex Agents could be a huge deal that could draw in new customers or be a major upsell for existing customers.
Of course, it’s still early days in the agent race. But Snowflake’s Cortex agent isn’t just smart and capable of accomplishing multiple steps on its own; it has the right tools to get the job done right and the appropriate observability features (Snowflake Trail) in place to keep agents accountable.
All considered, it’s a very exciting time for Snowflake, given its packed product pipeline and its readiness for the next stage of the AI revolution. It’ll be very interesting to witness the kind of traction the firm can gain as demand looks to re-accelerate the data cloud firm’s growth after many years of choppy, underwhelming performance for early investors.
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