Snowflake (SNOW) stock has seen significant gains in 2025, largely driven by the company's strategic focus on artificial intelligence and its growing relationships with key AI industry players. The enterprise software provider, known for its data analytics and cloud data management solutions, has shown strong market performance, outperforming many of its software peers.
This growth comes as many companies are looking to modernize their data infrastructures. They want to create custom AI applications and leverage industry-specific generative AI models. Snowflake's offerings are central to these efforts, positioning it at the forefront of the evolving AI landscape.
Key Takeaways
- Snowflake stock increased by 49% in 2025, outperforming many software companies.
- The company is benefiting from its role in supporting artificial intelligence applications and key AI customers like OpenAI.
- Snowflake is developing a new product, "Snowflake Intelligence," designed for natural language data interaction.
- The company operates on a consumption-based business model, charging customers based on usage rather than subscriptions.
- Despite strong growth, Snowflake faces competition from rivals such as Databricks and potential challenges from open-source data technologies.
Snowflake's Market Performance and AI Focus
Snowflake's stock has risen notably in 2025, with a 49% increase year-to-date. This performance surpasses that of many other software companies. The company's core business involves providing data analytics software that operates on major cloud platforms, including Amazon Web Services (AWS).
Beyond analytics, Snowflake has expanded its offerings to become a comprehensive cloud data management provider. This evolution is critical as businesses increasingly seek to organize and utilize their vast amounts of data for advanced applications.
Stock Performance Snapshot
- 2025 Gain: 49%
- Current Trading: $240.54 (as of October 2, 2025)
- Daily Rise: 4.3%
- Technical Pattern: Forming a flat base with an early entry point at $231.94.
Snowflake, along with companies like Databricks and Palantir Technologies, is actively helping businesses prepare their proprietary data. This preparation is essential for customizing AI applications and training industry-specific generative AI models. Many organizations are currently testing autonomous, goal-driven AI agents, which require robust data management solutions.
On the stock market, Snowflake shares closed at $240.54, marking a 4.3% rise. Technically, the stock is forming a flat base, a pattern often seen after a significant advance. An early entry point was identified at $231.94, the high from September 19. The stock is also trading above its 21-day exponential and 50-day moving averages, indicating positive momentum.
Strategic Customer Relationships and Product Development
A key driver of Snowflake's recent success is its relationship with major players in the AI sector, notably OpenAI. OpenAI, a leader in AI model development and the creator of ChatGPT, is a significant Snowflake customer. According to Citi analyst Tyler Radke, OpenAI uses the Snowflake platform for core analytics and engineering.
"OpenAI is a customer using the (Snowflake) platform for core analytics and engineering. Specifically, OpenAI is their largest customer in the AI bucket and usage is growing nicely quarter-over-quarter," Radke stated in a report.
While OpenAI and other AI startups currently account for 1% of Snowflake's total revenue, this figure is increasing rapidly. UBS analyst Karl Keirstead highlighted the importance of upcoming events. "OpenAI's DevDay on Oct. 6 will be closely-watched, a venue to disclose new products," Keirstead noted.
OpenAI's Role
OpenAI is a leading artificial intelligence research company. It is known for developing advanced AI models, including the GPT series, and the widely used conversational AI, ChatGPT. Its events often unveil new technologies and partnerships that influence the broader AI industry.
Despite this strong relationship, it is important to note that the OpenAI-Snowflake partnership is not exclusive. In September, Databricks and OpenAI announced a multiyear agreement worth $100 million. This deal focuses on selling AI services to large business customers. Under this agreement, OpenAI's models, including GPT-5, will be available directly to businesses using Databricks' platform. This allows them to build AI agents on top of their corporate data. It remains unclear if OpenAI uses Databricks' platform internally for its own operations.
Introducing Snowflake Intelligence
Snowflake is also preparing to launch a new product called "Snowflake Intelligence." Morgan Stanley analyst Sanjit Singh described this as a potentially significant offering. Currently in public preview, Snowflake Intelligence is an agent-powered solution.
It enables users to engage in natural language conversations with all their data, both structured and unstructured. This aims to make data interaction more accessible and intuitive for a wider audience. Snowflake CEO Sridhar Ramaswamy has called Snowflake Intelligence the company's most important current initiative.
"CEO Ramaswamy called Snowflake Intelligence the most important thing that Snowflake is doing as a company today. The key opportunity behind Snowflake Intelligence is that it directly exposes Snowflake to a much wider audience whereas historically Snowflake was hidden behind dashboards and business intelligence tools like (Salesforce's) Tableau," Singh explained.
This new product could significantly broaden Snowflake's market reach. Historically, Snowflake's platform was often accessed indirectly through other business intelligence tools. Snowflake's data warehouse allows customers to share data with partners across various online storage systems. It also facilitates easy sharing of searchable data between applications.
Leadership Change and Financial Performance
Snowflake's stock saw a surge in late August following a strong second-quarter earnings report. Both revenue and earnings exceeded Wall Street expectations. The company reported a 32% increase in revenue, reaching $1.1 billion. This surpassed the consensus estimate of $1.09 billion.
For the upcoming October quarter, Snowflake projected product revenue to be between $1.125 billion and $1.130 billion. This forecast is also above the consensus estimate of $1.12 billion. The emerging flat base pattern in the stock chart began forming after this positive earnings announcement.
In early 2024, Sridhar Ramaswamy took over as the new chief executive officer. Ramaswamy was previously a senior vice president at Snowflake. He joined the company after it acquired Neeva, an AI startup he founded. Before Neeva, Ramaswamy led Google-parent Alphabet's digital advertising business, bringing extensive experience to his new role.
Competition and Business Model
Snowflake operates in a competitive market, facing strong rivalry from companies like Databricks. Both firms have been active in acquisitions to strengthen their positions. Snowflake's stock performance has exceeded that of some software peers, including Salesforce (CRM) and ServiceNow (NOW).
The iShares Expanded Tech-Software Sector ETF, a broad industry index that includes major software companies like Microsoft (MSFT), has advanced 15% this year. Some large-cap software companies have underperformed in 2025. This is due to investor concerns about traditional "per seat" licensing models. If AI improves productivity and leads to job reductions, the demand for per-seat software licenses could decrease.
However, Snowflake employs a consumption-based business model. This means it charges clients based on their actual software usage, rather than fixed subscriptions. This model may offer more flexibility and resilience in a changing market driven by AI's impact on workforce productivity.
Potential Challenges from Open-Source Technologies
Despite its strengths, Snowflake, along with Databricks and similar companies, could face challenges from open-source data storage technologies. Technologies like Apache Iceberg, for example, allow organizations to store data in open, standardized formats. This contrasts with Snowflake's approach of storing customer data on proprietary platforms, which can make it difficult for customers to switch providers.
Founded in 2012, Snowflake made headlines with the largest initial public offering (IPO) ever by a software company in September 2020, raising $3.4 billion. However, the stock experienced a downturn in 2022. This was due to analyst concerns regarding its high valuation and slowing revenue growth.
Technical Ratings and Market Position
According to IBD Stock Checkup, Snowflake stock holds an IBD Composite Rating of 89. This rating combines five proprietary metrics, with top growth stocks typically scoring 90 or higher. Snowflake also has an Accumulation/Distribution Rating of C-. This rating analyzes price and volume changes over 13 weeks, indicating that more funds are currently buying than selling the stock.
The stock's 21-day Average True Range (ATR) is 3.12%. ATR measures a stock's typical price volatility. Stocks with higher ATRs tend to have larger daily price movements, which can be challenging for investors. IBD generally suggests stocks with ATRs up to 8%.
Snowflake's strategic positioning in cloud data management and its increasing integration with the AI ecosystem suggest continued relevance. However, the evolving competitive landscape and the rise of open-source alternatives will be key factors to watch in its future trajectory.
