Why I think $SNOW is one of the most undervalued winners in the AI market
AI Is Snowflake’s Power Play
The explosion of AI means that businesses need a lot more data and faster ways to process it. Snowflake’s entire business is based on helping companies store, manage, and analyze massive amounts of data. And as AI grows, so does the need for platforms like Snowflake to help businesses handle that data efficiently.
Snowflake believes AI models need to work closely with data, and its platform is designed to do just that. As data volume grows, Snowflake’s unique pay-as-you-go pricing model allows businesses to scale their data usage without having to commit to large contracts. This positions Snowflake perfectly for the AI boom.
Expanding into AI with New Products
Snowflake isn’t just sitting on the sidelines when it comes to AI. The company has launched a number of new AI-driven products and innovations designed to help businesses leverage their data for AI applications.
• Cortex AI: One of Snowflake’s flagship AI products, Cortex AI is already being used by companies like Penske Logistics to improve transportation performance. Another large financial services firm is using it to analyze unstructured data (like customer service calls) to improve customer experiences.
• Iceberg: Over 400 companies are already using Iceberg, which helps businesses migrate to the cloud faster and more efficiently. Snowflake highlighted that one of the largest hospitality companies is using Iceberg to move their data to the cloud -- signaling strong customer interest.
• Notebooks: This new product, still in public preview, is already seeing strong adoption with over 1,600 accounts using it. Notebooks is specifically designed for data scientists and allows them to interact directly with their data -- making it easier to build AI models.
The Growth Potential Is Massive
Unlike most software companies that use a subscription model, Snowflake operates on a usage-based pricing system. This means customers only pay for the data they actually use. While this can lead to more unpredictable revenue growth, it also means Snowflake can capture more upside as businesses continue to expand their data needs -- especially in the age of AI.
Snowflake's consumption-based model makes it agile, allowing it to adjust as businesses require more or less data storage and processing. While the current macroeconomic environment is causing some companies to tighten their budgets, Snowflake is positioned to benefit when businesses ramp up their AI projects and demand more data power -- I believe we're about to enter a golden age of business spending in this new cycle.
Snowflake estimates that the TAM for cloud data platforms will grow to $350 billion by 2028, and right now, Snowflake is only capturing about 1% of that. This means there is a ton of room for growth, and with AI driving even more demand for data storage and analysis -- Snowflake is in a great position to grab a bigger share of the market.
Despite the current challenges, Snowflake is still growing. It added around 450 new customers in Q2 alone, growing its customer base by 37% YoY. And while customers have been optimizing their spending (aka spending a bit less), Snowflake’s revenue retention rate is stabilizing, showing signs of improvement.
Final Thoughts
AI is set to reshape the entire software landscape, with many companies likely to be disrupted or even cannibalized by the technology. However, there will be a select group of winners that emerge with unprecedented pricing power and the market will reward them with premium valuations. These companies won't just survive AI—they’ll thrive in it, because AI enhances their core offerings rather than threatening them. $PLTR, $NET, and $CRWD are prime examples -- as AI supercharges their value propositions and safeguards their business models from cannibalization.
Snowflake is positioning itself to join this elite group. As AI applications grow, they need enormous amounts of data, and Snowflake’s usage-based pricing model means the more data businesses need, the more Snowflake benefits. The company’s innovative product offerings, particularly AI tools like Cortex, are designed to take full advantage of this shift, and Snowflake’s strong customer base will be key to driving future growth. As companies accelerate their AI investments, Snowflake has the potential to command a premium valuation by offering exactly what AI-driven enterprises need -- efficient data management at scale.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
🌲ex IBDer
📝Swing Trader since 2014
📚There are 3 ways to earn money: be fast, be smart or cheat.
751Followers
34Following
4373Visitors
Follow
李白的李 : Is it possible that everyone just needs to buy chips, and no one can fall behind, but the application side has not made a breakthrough.
黑客淘金者 : The technology trend is advancing, everyone is stepping into the rising trend. The big sell-off next week will catch all the investors off guard, this is the trick of the players.
Capital Gains : snow is not the same. Alot of the piviotal people who help make them the company they WERE left with the CEO that left less than a year ago. Frank the tank didnt put up with BS and excuses for not making things happen and this is why CEOs like Elon Musk and Frank Slootman take average companies to the top