Jefferies Financial Group Inc.: Databricks valuation soaring drives revaluation of AI data platform, Snowflake (SNOW.US) expected to rise another 14%

Jefferies Financial Group Inc. expressed that after competitor Databricks secured a new round of funding and reached a valuation of 188 billion US dollars, data warehouse software giant Snowflake(SNOW.US) may experience a "reassessment" in its stock price. Jefferies Financial Group Inc. reaffirmed its "buy" rating for Snowflake and slightly increased its target price from 300 US dollars to 310 US dollars, 14% higher than the current stock price. According to reports, Databricks is undergoing a new round of funding, led by Coatue Management. This round of funding values the company at 188 billion US dollars, a 40% increase from its valuation of 134 billion US dollars in the previous round of funding in December 2025. This round of funding is expected to be completed by the end of this summer. Jefferies Financial Group Inc. analyst Brent Thill wrote in a research report, "The latest financial disclosure information was not attached to this round of funding, but looking back to mid-June, Databricks predicted that its annualized revenue for the first half of its 2027 fiscal year is expected to exceed 6.9 billion US dollars, with a year-on-year growth rate of about 80% (core business growth about 65%, including commercialization revenue from LLM growing by about 80%); in comparison, we previously estimated Snowflake's annualized revenue for the first half of its 2027 fiscal year to be about 5.5 billion US dollars, a growth rate of 32%." The analyst added, "Our assumption scenario analysis shows that at the current valuation, Databricks' market-to-sales ratio for the 2028 fiscal year is approximately 14-20 times. Assuming a compound annual growth rate of 65% for Databricks from the 2026 fiscal year to the 2028 fiscal year, the 188 billion dollar valuation implies a market-to-sales ratio of about 17 times for the 2028 fiscal year. Snowflake currently trades at 13 times the expected revenue for the 2028 fiscal year, with an enterprise value of 100 billion US dollars. We believe Snowflake will benefit from this valuation effect, and even with a discount market-to-sales ratio of 15 times, its stock price will reach 310 US dollars, with an enterprise value of about 115 billion US dollars." AI data race expected to "raise all boats" According to reports, Databricks and Snowflake are major competitors in the data analytics field. Databricks initially started as a data platform and has successfully transitioned into an artificial intelligence (AI) infrastructure provider. The company recently launched products including the AI assistant Genie series, the AI intelligence database Lakebase, and governance tools like Unity AI Gateway. Databricks is considered by analysts to be one of the top private tech companies expected to go public after OpenAI and Anthropic. Databricks CEO Ali Ghodsi recently stated that the increase in GPU demand was the direct reason for the new round of funding. In an interview, he said, "Our GPU capacity in Asia is almost saturated, while demand in many countries including Japan, South Korea, the US, and India continues to grow. Therefore, we need to purchase a large amount of additional GPUs, which requires a large amount of capital. It is this demand that has prompted us to conduct the latest round of funding: we have received a large number of customer requests, urgently needing more GPU capacity." Based on this logic, Thill believes the industry will experience a "rising tide lifting all boats" situation, with Snowflake expected to benefit from it. Thill added, "We still believe that the leading data analytics companies Databricks and Snowflake have the best competitive advantage to help enterprises extract the value of their business data, utilize AI to run analytical workflows faster and more efficiently. We expect the overall industry sentiment to continue to rise. Databricks' Genie and Snowflake's CoCo/CoWork are gaining more and more attention, and early adoption metrics are showing an upward trend." Snowflake's stock price rises against the trend, Wall Street analysts optimistic Since the beginning of this year, Snowflake's stock price has accumulated a 24% increase, standing out in the overall pressured US SaaS sector. With the shadow of AI disruption looming, the iShares Expanded Tech-Software Sector ETF (IGV), widely regarded as a benchmark for this sector, has fallen more than 13% this year. Snowflake's impressive performance is a key support in its independent market trend. Thanks to the strong performance of its core data platform business and the "significant improvement" brought by AI tools, Snowflake's first-quarter financial report revenue and profit exceeded expectations and raised its full-year performance guidance. In addition, the company's stock price soared 37% post-earnings, reversing its downward trend earlier in the year, following a five-year $6 billion long-term compute partnership with AWS. Tipranks data shows that, overall, Wall Street analysts give Snowflake a "strong buy" rating with a target price of $301.09, 11% higher than the latest closing price.