Snowflake (SNOW) is seeing sustained growth in product revenue supported by a "stable" core cloud data warehousing business, better sales execution, and traction with new products, Morgan Stanley said in a note Thursday.

The company reported Q1 product revenue growth of 26% year over year and issued a Q2 product revenue growth guidance of 25% above consensus, while raising its fiscal year 2026 product revenue growth outlook to 25% from 24%, Morgan Stanley said.

"A stable core, coupled with building momentum in data engineering and early signs of traction in AI and applications, sets the stage for durable 20% [plus] growth over the next several years with operating margins heading higher," analysts said in the note.

Morgan Stanley raised its price target to $200 from $185, while maintaining its rating at equal-weight.

Shares of Snowflake were up more than 9% in recent trading.

Price: 196.06, Change: +16.94, Percent Change: +9.46