Bank of America Upgrades Snowflake Ahead of Earnings

Snowflake, once the poster child for the cloud data revolution, has had its share of ups and downs since its blockbuster IPO in 2020. The stock soared, then slumped, as tech valuations cooled and investors questioned whether enterprise customers would continue spending at the same pace. Now, Bank of America (BofA) is offering a fresh narrative: the tide is turning.

Just days before Snowflake reports earnings, BofA upgraded the stock and projected more than 20% upside. The move suggests that Wall Street’s patience with the company may finally be rewarded, especially as demand for data-driven decision-making accelerates again.

Why Bank of America Is Betting on Snowflake

BofA’s analysts are making a bold call. Their thesis rests on three pillars:

• Rebound in cloud spending: After a year of cost-cutting and “optimization,” enterprise customers are gradually returning to growth mode.
• Snowflake’s strategic positioning: As the leading data cloud platform, Snowflake isn’t just competing on storage — it’s becoming indispensable for AI, analytics, and cross-cloud integration.
• Improving profitability profile: With margins expanding and operating discipline tightening, Snowflake is beginning to show financial resilience that investors long demanded.

In other words, the upgrade isn’t about hype. It’s about fundamentals catching up with promise.

A Rollercoaster Since IPO

Snowflake entered public markets with one of the most hyped IPOs in tech history. Backed by Warren Buffett’s Berkshire Hathaway — a rare tech investment for the Oracle of Omaha — the company instantly commanded attention. Its shares skyrocketed, briefly making Snowflake the most valuable software IPO ever.

But exuberance faded. Rising interest rates, tighter budgets, and questions about growth sustainability dragged the stock down. Investors who bought near the peak endured a harsh lesson in the volatility of tech darlings.

Still, Snowflake’s story didn’t end there. Unlike many pandemic-era high-flyers, the company maintained a sticky customer base, with Fortune 500 firms relying on its data platform. And now, with Bank of America’s fresh endorsement, that endurance may be turning into renewed momentum.

The AI Factor: Snowflake’s Silent Advantage

No conversation about technology in 2025 is complete without mentioning artificial intelligence. For Snowflake, AI is not a side project — it’s becoming the backbone of its long-term strategy.

Snowflake’s data cloud allows enterprises to store, share, and analyze massive datasets across multiple environments. With generative AI and machine learning demanding structured, high-quality data, Snowflake’s infrastructure is uniquely positioned to serve as the “engine room” of AI adoption.

• AI-ready data architecture gives clients faster model training and deployment.
• Marketplace for data sharing allows companies to exchange insights securely.
• Integration with cloud giants such as AWS, Azure, and Google Cloud ensures scalability.

This positioning makes Snowflake less of a “nice-to-have” and more of a “must-have” for enterprises racing to leverage AI.

Investor Sentiment: Fear vs. Opportunity

The market has been divided on Snowflake. Bulls see it as a category-defining company, while skeptics argue it’s still too expensive relative to earnings.

Bank of America’s upgrade signals a potential shift in sentiment. If earnings show stabilization and cloud spending recovery, more institutions may follow. For retail investors, the question becomes: is this the right entry point?

While no investment is without risk, the 20% upside projected by BofA underscores the idea that Wall Street believes the worst of Snowflake’s turbulence may be behind it.

Storytelling Moment: A CIO’s Dilemma

Imagine being the Chief Information Officer of a multinational bank in 2023. Costs are ballooning, budgets are under scrutiny, and every department is pushing for AI pilots. You’re told to cut spending while simultaneously driving innovation.

Snowflake offers a paradoxical solution: spend more now to save later. By consolidating data silos into one platform, the company promises efficiency, security, and scalability. For many CIOs, the choice is clear — Snowflake becomes the foundation for survival in a digital-first economy.

This kind of real-world decision-making explains why, even through market headwinds, Snowflake has kept growing. Enterprises can delay cloud projects, but they can’t afford to ignore the data race.

What To Watch in the Upcoming Earnings

With earnings just around the corner, analysts and investors will be zeroing in on several key metrics:

• Product revenue growth: The lifeblood of Snowflake’s business.
• Net revenue retention rate (NRR): Indicates how much existing customers are spending.
• Operating margins: Proof of financial discipline amid expansion.
• Customer growth at the enterprise level: Especially Fortune 500 and global clients.

A strong showing across these categories could validate BofA’s bullish stance — and potentially trigger broader analyst upgrades.

Risks That Could Cool the Optimism

As promising as the outlook seems, risks remain:

1. Cloud spending volatility: Enterprises could reverse spending growth if macroeconomic conditions worsen.
2. Competition from hyperscalers: Amazon, Microsoft, and Google are all building rival solutions.
3. Execution risk: Snowflake’s expansion into AI and services must be seamless, or customers could hesitate.

For investors, weighing these risks against the upside potential is crucial.

Conclusion: A Frost Breaking Into Spring

Snowflake’s journey is a reminder of how quickly tech fortunes can shift. From sky-high expectations to sobering corrections, the company has endured cycles of hype and doubt. Now, with Bank of America’s endorsement and an AI-driven growth narrative, it stands at a potential inflection point.

Whether Snowflake delivers in the upcoming earnings remains to be seen. But one thing is clear: data is no longer just an asset — it’s the battlefield of the modern economy. And Snowflake, with its upgraded outlook, is stepping back into the spotlight.

FAQs

1. Why did Bank of America upgrade Snowflake?
Because of improving fundamentals, renewed enterprise cloud spending, and Snowflake’s strategic role in AI adoption.

2. What upside does BofA see for Snowflake stock?
The bank projects more than 20% upside potential in the near term.

3. Is Snowflake profitable yet?
While not fully profitable, the company is showing improving operating margins and financial discipline.

4. What makes Snowflake important for AI?
Its platform organizes and structures data for AI models, making it critical for enterprises adopting generative AI.

5. What risks should investors watch?
Macroeconomic headwinds, competitive threats from Amazon/Microsoft/Google, and execution challenges.