HSBC Upgrades Snowflake Rating to Buy, Target Price Increases to $289
Miles Bennett
HSBC upgraded Snowflake from hold to buy and lifted its target from $176 to $289 — driven by a beat-and-raise quarter, an Amazon partnership, and AI monetization shifting from narrative to numbers.
Why did HSBC flip bullish now?
Snowflake just posted earnings that beat expectations and announced a partnership with Amazon, sending the stock up more than 36% in a single day.
HSBC analyst Stephen Bersey responded by upgrading the rating from hold to buy and raising the target from $176 to $289.
This means → HSBC sees this rally as a fundamental inflection, not a sentiment spike.
130× earnings — how is that "reasonable"?
Snowflake currently trades at roughly 130× its 2026 estimated non-GAAP P/E; the sector median is just 24.2× — more than five times cheaper.
But HSBC forecasts Snowflake's non-GAAP EPS will compound at 49.8% annually from FY2026 to FY2031 — over triple the peer-typical pace of 10%–15%.
In plain terms = whether a stock is expensive depends on how fast it grows; HSBC's argument is "triple the growth rate earns the premium."
What exactly did HSBC change in its model?
The target PEG multiple was raised from 2.0× to 2.75×, to match AI-driven earnings durability and align with AI-peer valuations.
The next-twelve-month non-GAAP EPS estimate went from $1.81 to $2.11.
This reflects a re-pricing of Snowflake's entire earnings curve, not just a one-quarter beat.
How far along is AI monetization?
HSBC specifically flagged Cortex Copilot — Snowflake's AI assistant product — noting that market confidence in its ability to lift the company's long-term growth trajectory is rising.
At the same time, Snowflake continues to show strong margin discipline, reinforcing its earnings momentum.
Put simply = AI is no longer just a slide-deck story — it is showing up in actual revenue and profit numbers, and that is the core reason HSBC turned bullish.
Content is for reference only, not financial advice.