Jefferies: Soaring DataBricks valuations drive AI data platform revaluation Snowflake (SNOW.US) is expected to rise another 14%

The Zhitong Finance App learned that Jeffrey said that after competitor Databricks received a new round of financing and the valuation reached 188 billion US dollars, the stock price of data warehouse software giant Snowflake (SNOW.US) may face a “revaluation.” Jefferies reaffirmed Snowflake's “buy” rating and slightly raised its target price from $300 to $310, which is 14% higher than the current share price.

According to reports, Databricks is undergoing a new round of financing, led by Coatue Management. The company's valuation of this round of financing was US$188 billion, up 40% from its valuation of US$134 billion after the previous round of financing in December 2025. The funding round is expected to be completed by the end of this summer.

Jefferies analyst Brent Thill wrote in the research report: “This financing was not accompanied by the latest financial disclosure information, but looking back at mid-June, Databricks predicted that its annualized revenue for the first half of FY2027 was expected to exceed US$6.9 billion, a year-on-year growth rate of about 80% (core business growth of about 65%, and an increase of about 80% after incorporating LLM commercialization revenue); in comparison, we previously anticipated Snowflake's annualized revenue for the first half of fiscal year 2027 to be about US$5.5 billion, an increase of 32% year over year.”

The analyst added, “Our what-if scenario analysis shows that Databricks's projected market-sales ratio for the 2028 fiscal year is approximately 14-20 times under current valuations. Assuming Databricks's compound annual growth rate from FY2026 to FY2028 is 65%, then the $188 billion valuation means that its market-sales ratio for FY2028 is about 17 times. Snowflake's current transaction valuation is 13 times the expected revenue for fiscal year 2028, and the enterprise value is $100 billion. We think Snowflake will benefit from this valuation effect, and even if the market-sales ratio is reduced by 15 times, its stock price will reach $310, and the enterprise value will be around $115 billion.”

The AI data circuit is expected to “rise above sea level”

According to reports, Databricks and Snowflake are the main competitors in the field of data analysis. Databricks started as a data platform and has now successfully transformed into an artificial intelligence (AI) infrastructure provider. The company recently launched products including the Genie AI assistant series, LakeBase, a database for AI agents, and the governance tool Unity AI Gateway. DataBricks is regarded by analysts as one of the top private tech companies expected to go public after OpenAI and Anthropic.

Databricks CEO Ali Ghodsi recently stated that the increase in GPU demand is the direct reason for the new round of financing. In an interview, he said, “Our GPU production capacity in Asia is almost saturated, and demand is growing in many countries, including Japan, South Korea, the US, and India. As a result, we needed to buy a lot of additional GPUs, which required a lot of money. It is this demand that prompted us to launch our latest round of financing: we have received a large number of customer requests and are in urgent need of more GPU production capacity.”

Based on the above logic, Thill believes that the industry will usher in a “boom in water” situation, and Snowflake is expected to benefit from it.

Thill added, “We still believe that leading data analysis vendors Databricks and Snowflake have the best competitiveness to help enterprises tap the value of business data and use AI to run analysis workflows faster and more efficiently. We expect the overall boom in the industry to continue to rise. Databricks Genie and Snowflake's COCOCO/Cowork are both getting more and more attention, and early adoption metrics are also showing an upward trend.”

Snowflake shares bucked the trend and Wall Street analysts are optimistic

Since this year, Snowflake's stock price has risen by 24%, standing out from the US SaaS sector, which is under overall pressure. As the haze of AI disruption looms, the iShares Expanded Technology Software Sector ETF (IGV), which is a broad reference indicator for this sector, has fallen by more than 13% so far this year.

Outstanding performance is an important support for Snowflake to break out of the independent market. Thanks to the strong performance of the core data platform business and the “meaningful increase” brought about by AI tools, Snowflake's first-quarter earnings report exceeded expectations and raised the full-year performance guidelines. In addition, it reached a five-year long-term computing power cooperation of 6 billion US dollars with AWS. The company's stock price performance then soared 37%, reversing the decline during the year in one fell swoop.

According to Tipranks data, overall, Wall Street analysts rated Snowflake a “strong buy”, with a target price of $301.09, which is 11% higher than the latest closing price.