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Snowflake (NYSE:SNOW) is heading into its September 2 earnings report with a strong growth narrative. Prior to earnings, on August 20, TD Cowen raised its price target on the stock to $370 from $300 while maintaining a Buy rating.
The firm is not alone, Deutsche Bank, Truist, Bofa, and UBS have all raised their targets recently. Almost everyone is talking about Cortex Code, an AI-powered coding agent built directly into the Snowflake data cloud.
Branded as CoCo, the AI coding tool has driven Snowflake's best sequential growth in its history. We know that AI is improving Snowflake's growth story, but how much of the improvement is already priced in?
For the first quarter of fiscal 2027, Snowflake achieved revenue of $1.39 billion, representing 33% year-over-year growth. According to CEO Sridhar Ramaswamy, the milestone quarter reported product revenue of $1.33 billion, up 34% year-over-year, marking the strongest sequential dollar growth in company history.
Remaining performance obligations were $9.21 billion, representing 38% year-over-year growth. Cortex Code and Snowflake Intelligence, in particular, are becoming central for Snowflake's vision of the Agentic Enterprise.
For the full-year of fiscal 2027, management raised product revenue outlook to $5,840 million, representing 31% year-over-year growth, and up from previous guidance of $5,660 million. These numbers suggest how Snowflake's long growth slowdown may be finally reversing.
TD Cowen highlighted two growth catalysts for Snowflake. The first is CoCo, the AI coding agent introduced previously as Cortex Code. According to the firm, the coding agent is unleashing many new AI accelerants.
Another potential catalyst working in favor of Snowflake is its Cortex AI gateway, a centralized control plane and governance layer for enterprise AI agents. The product enables enterprises to manage AI agents and monitor AI consumption costs. It allows the company to move deeper into AI operations and security, enabling a robust Snowflake ecosystem.
Together, the two catalysts could help drive another strong quarter of growth acceleration.
Despite the catalysts, Snowflake (NYSE:SNOW) stock is already 48% up year-to-date. This means that the stock is already up before the price targets caught it. Since good news tends to move up stock only when the market didn't expect it, it's hard to say whether Snowflake's quarter will make the stock budge if it's good and not great.
As per Insider Monkey's database, 80 hedge funds held stakes in SNOW in the first quarter of 2026, down from 90 in the prior quarter. More recent Q2 filings point to substantial buying by several major funds. This includes Point72 Asset Management, which boosted its position by roughly 2,449% to 2.81 million shares worth $716.1 million.
Despite this bullishness, TD Cowen expects upward pressures on valuation. Overall, while the stock's bull case is credible due to its AI products and growth improvement, the stock now leaves little room for disappointment. This doesn't outright imply that SNOW is overvalued, but that the easy re-rating has likely already happened. It seems that the stock demands another surprise from here to move, not just confirmation of the trend everyone is expecting.
While we acknowledge the potential of SNOW as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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Disclosure: None. Follow Insider Monkey on Google News.
Oppenheimer Says Cortex Code Is Driving Increased Consumption; Raises PT On Snowflake (SNOW) To $295 Insider Monkey • 2mo ago SNOW
Oppenheimer Says Cortex Code Is Driving Increased Consumption; Raises PT On Snowflake (SNOW) To $295
Truist Raises Snowflake Inc. (SNOW) Price Target to $300 from $275 Insider Monkey • 2mo ago SNOW TFC
Truist Raises Snowflake Inc. (SNOW) Price Target to $300 from $275
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