Deutsche Bank Raises Price Target on Snowflake’s Strong Quarter
Deutsche Bank analysts raised their price target on Snowflake (NYSE: SNOW) following the company’s better-than-expected second-quarter results, reported on August 21, 2026. The new target, which was not disclosed in the source, reflects growing confidence in the data cloud company’s ability to monetize its AI investments.
Snowflake’s revenue grew 28% year-over-year to $1.1 billion, exceeding consensus estimates, while product revenue came in at $1.04 billion. The company’s remaining performance obligations (RPO) surged to $7.2 billion, up 45% from the prior year, signaling robust future demand. Deutsche Bank’s action underscores a broader optimism among analysts who see Snowflake as a key beneficiary of the AI-driven data boom.
The stock has rallied roughly 15% since the earnings release, trading around $185 as of September 2, 2026. However, the company still faces challenges, including high operating expenses and intense competition from cloud giants like Microsoft and Amazon.
Why RPO Growth Signals Durable AI-Driven Demand
The 45% jump in RPO is the standout metric, indicating that customers are committing to longer-term contracts, often tied to AI and machine learning workloads. This is not just a one-off beat; it suggests that enterprises are shifting from experimental AI projects to production-scale deployments, which require Snowflake’s scalable data infrastructure.
Deutsche Bank’s price target hike likely reflects this durability. Historically, RPO growth has been a leading indicator of future revenue, and the acceleration from 38% in the previous quarter to 45% suggests momentum is building. The bank’s analysts probably see this as evidence that Snowflake’s ecosystem is becoming stickier, with customers integrating Snowflake into their core data operations.
The AI Data Cloud Competition Heats Up
Still, Snowflake’s path is not without obstacles. Rivals such as Databricks, backed by major cloud providers, are vying for the same AI workloads. While Databricks is private, its aggressive growth and open-source strategy pose a direct threat. Moreover, hyperscalers like Microsoft (NASDAQ: MSFT) and Amazon (NASDAQ: AMZN) bundle their own data services, making it harder for Snowflake to maintain its premium pricing.
Deutsche Bank’s upgrade may be a contrarian call, as the market had previously fretted about Snowflake’s slowing growth rate. The company’s net revenue retention rate, which slipped to 128% from 131% a year ago, shows that existing customers are still expanding, but at a slightly slower pace. This nuance matters: while new customer acquisition is strong, the focus must be on deepening wallet share among current clients to sustain the momentum.
What to Watch Next: Earnings Guidance and AI Product Launches
Investors should keep an eye on Snowflake’s upcoming product announcements, particularly around its AI features like Snowflake Cortex, which were highlighted during the earnings call. The company’s ability to convert these innovations into revenue will be critical. Additionally, watch for updates on its partnership with Nvidia (NASDAQ: NVDA), which aims to optimize AI model training on Snowflake’s platform.
The next major catalyst is the company’s Q3 earnings report, expected in late November 2026. Specifically, watch whether product revenue guidance exceeds the $1.14 billion consensus, and whether RPO growth continues to accelerate. If Snowflake can sustain RPO growth above 40% and show improving operating margins, the stock could justify a higher multiple. Conversely, any signs of deceleration in customer spending or increased competition could undermine the bullish thesis.
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