Bond.az - HSBC upgraded Snowflake Inc. (NYSE:SNOW) to Buy from Hold on Friday and raised its price target to $289 from $176, citing strong adoption of the company’s AI product. The stock surged 39% in the past week to $239.20.
HSBC analyst Stephen Bersey said CoCo marks the clearest evidence of Snowflake’s AI monetization opportunity. Since general availability in February 2026, CoCo has scaled to more than 7,100 accounts and contributed meaningful AI revenue.
Management identified CoCo as the largest driver of the fiscal 2027 guidance upgrade. Core data platform consumption also accelerated as customers moved workloads to Snowflake faster to support governed AI use cases.
AI is now accelerating both direct AI revenue and core platform consumption. Management reiterated fiscal 2027 product gross margin guidance of 75% and raised operating margin guidance by 100 basis points amid the AI mix shift.
HSBC expects AI-led product adoption to deepen as more customers move from pilot to production workflows. While Snowflake remains unprofitable over the last twelve months, analysts predict profitability this year with EPS forecast at $2.83.
