Next 'AI party' phase is coming to boost software firms like Snowflake, Elastic, Palantir
Published: 14:45 26 Nov 2024 EST
Artificial intelligence sector names Snowflake (NYSE:SNOW) and Elastic (NYSE:ESTC) were upgraded to a positive rating by Wedbush on Tuesday as it sees opportunities for other software players to "get in on the AI party" as further uses for the technology emerge.
The brokerage reflected confidence in the next phase of the AI revolution, namely the "enterprise consumption phase", with launch of large language models (LLMs) for thousands of companies and further adoption of generative AI that it reckons "will be a major catalyst for the software sector and key players".
Price targets also raised for Palantir Technologies Inc (NYSE:PLTR) and Salesforce Inc (NYSE:CRM, ETR:FOO) as demand for AI solutions accelerates.
Rating both 'outperform', Snowflake’s price target was lifted to $190 versus the last close price of just over $171, while Elastic was given a $135 price target versus its last close just under $111.5.
The change in rating for Snowflake’s sprang from its positioning to benefit from AI-driven use cases over the next 12-18 months, said analyst Dan Ives, noting a “marked improvement” in its product revenue growth and highlighted its readiness for enterprise adoption in FY26.
As for Elastic, Ives pointed to growing customer interest in its AI-enabled platform and migration programs, describing the company as “in the right place at the right time” to capture market share.
Palantir’s outlook reflects optimism in its "game-changing" AI platform (AIP) strategy, designed to integrate LLMs and other advanced AI capabilities directly into the workflows of enterprises and government clients.
Following positive customer feedback, Salesforce is seen to have expanding use cases across its product portfolio, as it capitalizes on "the transformational demand" for AI solutions.
