Jefferies: Databricks valuation surge fuels AI data platform revaluation, Snowflake (SNOW.US) could rise another 14%

According to Zhitong Finance APP, Jefferies stated that after its competitor Databricks secured a new round of funding, reaching a valuation of $188 billion, shares of data warehouse software giant Snowflake (SNOW.US) may see a “re-rating.” Jefferies reaffirmed its “Buy” rating on Snowflake and slightly raised its target price from $300 to $310, which is 14% above the current share price.

It is reported that Databricks is conducting a new financing round led by Coatue Management. This round values the company at $188 billion, a 40% increase from its $134 billion valuation in December 2025. The round is expected to complete by late summer this year.

Jefferies analyst Brent Thill wrote in a research note: “This financing did not come with the latest financial disclosures, but looking back at mid-June, Databricks then projected that its annualized revenue in the first half of FY2027 would surpass $6.9 billion, with year-over-year growth of about 80% (core business up about 65%, and including LLM commercialization revenue, up about 80%). By comparison, we previously projected Snowflake’s annualized revenue for the first half of FY2027 at about $5.5 billion, up 32% year-over-year.”

The analyst added: “Our hypothetical scenario analysis shows that at the current valuation, Databricks is trading at an estimated 14-20 times price-to-sales (P/S) for FY2028. Assuming Databricks achieves a 65% compound annual growth rate from FY2026 to FY2028, its $188 billion valuation would imply a P/S of roughly 17x for FY2028. Snowflake currently trades at 13x expected revenue for FY2028, with an enterprise value of $100 billion. We believe Snowflake will benefit from this rerating effect—even if its P/S is discounted to 15x, its share price would reach $310, with an enterprise value of about $115 billion.”

The AI Data Track Expected to “Rise With the Tide”

It is reported that Databricks and Snowflake are major competitors in the data analytics field. Databricks, which began as a data platform, has successfully transformed into an artificial intelligence (AI) infrastructure provider. The company recently introduced the Genie suite of AI assistants, its Lakebase database for AI agents, and governance tool Unity AI Gateway, among other products. Analysts view Databricks as one of the top private tech companies likely to go public after OpenAI and Anthropic.

Databricks CEO Ali Ghodsi recently stated that the surge in GPU demand was the direct driver for the new round of funding. In an interview, he said: “Our GPU capacity in Asia is nearly saturated, and demand continues to grow in many countries, including Japan, South Korea, the United States, and India. Therefore, we need to purchase a large amount of additional GPUs, which requires a tremendous amount of capital. This demand is precisely what drove the latest financing: we have received a large number of requests from customers urgently needing more GPU capacity.”

Based on this logic, Thill believes that the industry will see a “rising tide lifts all boats” effect, with Snowflake being poised to benefit.

Thill added: “We still believe that leading data analytics vendors Databricks and Snowflake have the most competitive advantage, helping enterprises unlock business value from data and enabling AI-powered analytics workflows to run faster and more efficiently. We expect the overall industry to remain in an upward cycle. Databricks’ Genie and Snowflake’s CoCo/CoWork continue to gain attention, with early adoption indicators also on the rise.”

Snowflake Stock Rises Against the Trend, Wall Street Analysts Remain Bullish

Since the start of the year, Snowflake stock has risen 24% in total, standing out in the broadly pressured U.S. SaaS sector. With the shadow of AI disruption looming, the iShares Expanded Tech-Software ETF (IGV)—a widely referenced sector index—has dropped over 13% year to date.

Strong performance is a key driver behind Snowflake’s independent stock trend. Thanks to the solid performance of its core data platform business and “meaningful uplift” from its AI tools, Snowflake’s Q1 earnings and profit both far exceeded expectations, and its annual guidance was raised. Coupled with a five-year, $6 billion long-term computing power collaboration with AWS, the company’s shares surged 37% after earnings, immediately reversing its year-to-date decline.

According to Tipranks data, overall, Wall Street analysts have given Snowflake a “Strong Buy” rating, with a price target of $301.09, which is 11% above the latest closing price.