Snowflake (SNOW) is not immune to a declining spending trend as customers work around tighter budgets due to macroeconomic uncertainty, despite data analytics and machine learning being a priority, UBS Securities said in a note emailed Friday.
The investment firm said that feedback from the data storage company's enterprise partners indicates decent performance, but not standout. "Snowflake, on several occasions, has outperformed partner feedback," UBS added.
Both Snowflake and Databricks are gaining market share by taking workloads from legacy platforms like Oracle (ORCL), Teradata (TDC), and Hadoop, according to the note.
UBS said Snowflake's AI product, Cortex, is starting to see traction, which could open up monetization opportunities in the future. However, this is still in its early stages and not yet a significant growth driver.
The firm reiterated a neutral rating on the company's stock with a $200 price target.
Price: 183.11, Change: +0.14, Percent Change: +0.08
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