Last week, data company Snowflake (NYSE: SNOW) reported financial results for its fiscal third quarter of 2025. The market responded favorably to the report as evidenced by a big jump in Snowflake’s stock price. Today, the price is rising yet again, with Snowflake stock up 4% as of 10 a.m. ET. But it had been up more than this earlier in the day.

This morning, Wedbush analyst Dan Ives published a report stating that artificial intelligence (AI) is starting to revolutionize the software space and noted that Snowflake is a big beneficiary, according to The Fly. This motivated him to recommend buying Snowflake stock and to give it a price target of $190 per share, which still represents about 9% upside from today’s price.

Can AI supercharge Snowflake’s growth?

Drawing a connection between Snowflake and the potential of AI isn’t new. In fact, the company used to call itself merely “the Data Cloud company.” But at the start of its fiscal 2025 in February, it reworked its description to “the AI Data Cloud company.”

That said, AI potential hasn’t exactly manifested itself in Snowflake’s financial results. As the chart below shows, the company’s growth rate has continued decelerating even as the AI space is heating up.

SNOW Operating Revenue (Quarterly YoY Growth) data by YCharts

However, the latest earnings season did show that AI products and tools are catalyzing growth for various software companies. And for this reason, Ives is highlighting multiple companies that stand to benefit, including Snowflake, which is why the stock popped today.

The one number that’s turning heads

Snowflake CEO Sridhar Ramaswamy started the Q3 earnings call by saying, “Our AI feature family Snowflake Cortex is showing significant adoption.” And while the revenue growth rate still ticked lower, the claim can be backed up nevertheless.

Like many software companies, Snowflake’s customers pay for the software up front and then use it up over the life of the contract. This revenue under contract is known as Snowflake’s remaining performance obligations. Q3 obligations jumped to $5.7 billion, which was a massive 55% year-over-year jump. Therefore, there is substance behind Ives’ bullishness and investors are understandably optimistic.

Should you invest $1,000 in Snowflake right now?

Before you buy stock in Snowflake, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Snowflake wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $869,885!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

See the 10 stocks »

*Stock Advisor returns as of November 25, 2024

Jon Quast has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Snowflake. The Motley Fool has a disclosure policy.