Morgan Stanley’s Key Insights from Meetings with Snowflake Management

Morgan Stanley recently engaged with the management of Snowflake Inc., where CEO Sridhar Ramaswamy shared his vision for the company’s growth strategy. The main focus areas identified by the bank include accelerating product innovation and cultivating a data-driven culture within the sales organization.

Ramaswamy highlighted the importance of enhancing the Notebooks feature and easing customer transitions from outdated data warehouses. He stated, “We need to get better at Notebooks and make it easier for customers to migrate off of legacy data warehouses,” as reported by Morgan Stanley.

Given the current budget constraints and the expansion of product offerings beyond data warehousing, Ramaswamy is eager to reshape the sales organization to prioritize data-centric approaches. This strategy is intended to drive continuous identification and promotion of new use cases.

Morgan Stanley pointed out that Snowflake is focusing on three significant opportunities: using AI to enhance analytics accessibility, improving data engineering for lakehouse use cases, and establishing itself as a platform for AI and machine learning applications.

Despite these promising initiatives, Morgan Stanley expresses caution. They noted that concerns regarding data interoperability and increasing competition are increasingly reflected in Snowflake’s stock price, which is currently trading at 7.6 times its projected 2026 sales.

Consequently, Morgan Stanley has assigned an Equal Weight rating to the stock, indicating that it may take time for these initiatives to positively influence growth. The firm remarked, “With growth likely still moderating over the next few quarters, shares lack a catalyst for re-rating higher.”