Morgan Stanley Meetings with Snowflake Inc.
Overview
Morgan Stanley recently held discussions with Snowflake Inc. (NYSE:SNOW) management, where CEO Sridhar Ramaswamy shared his strategies for the company’s growth.
Key Focus Areas
1. Accelerating Product Innovation
Ramaswamy emphasized the importance of faster product innovation, especially enhancing the Notebooks feature and easing customer transitions from legacy data warehouses.
2. Fostering a Data-Driven Culture
The CEO expressed the need to develop a sales organization that focuses on data, which will help identify and promote new use cases.
Strategic Opportunities
Morgan Stanley identified three major opportunities for Snowflake:
– Leveraging AI to broaden analytics accessibility.
– Enhancing data engineering for lakehouse use cases.
– Acting as a platform for AI and machine learning applications.
Market Risks
Despite these strategic initiatives, Morgan Stanley is cautious about Snowflake’s outlook. The firm noted risks linked to data interoperability and rising competition, reflected in Snowflake’s stock price currently at 7.6 times its projected 2026 sales.
Investment Rating
Morgan Stanley retains an Equal Weight rating on Snowflake’s stock, indicating that it might take time before these initiatives lead to substantial positive growth. They mentioned that shares lack immediate catalysts for a price increase, especially with growth expected to moderate over the coming quarters.
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