What happened
Shares of Snowflake (SNOW 1.78%) were up about 10% as of 2:15 p.m. ET on Monday, after an analyst had some positive things to say about this investment opportunity.
So what
Technically speaking, Piper Sandler analyst Brent Bracelin lowered the price target for Snowflake stock from $200 per share to $194 per share, according to The Fly. The market could have taken this as a negative. But there's a reason why the market is choosing to take this as good news instead.
NYSE: SNOW
Key Data Points
Bracelin anticipates a season of slower growth for the massive cloud computing industry, of which Snowflake is a major player. However, even with this slowing-growth outlook, Bracelin still feels Snowflake can beat the market over the next year. And taking everything into account, the analyst only lowered the stock's price target by 3%.
In other words, Bracelin's price target takes negatives into consideration and still implies roughly 56% upside from where Snowflake stock traded before this morning's jump.
Now what
For what it's worth, Snowflake's management is anticipating a slowdown as well, at least relatively speaking. Revenue for the first three quarters of its fiscal 2023 was up nearly 77% from the same period of its fiscal 2022. However, for fiscal 2024, management only expects 47% year-over-year growth.
Snowflake's management shared these things over a month ago. Therefore, Bracelin's comments today don't really reflect new information, which is why I believe the market is getting a little too excited today.
