Investing.com - Morgan Stanley assumed coverage on Snowflake Inc . (NYSE: SNOW ) with an Overweight rating and set a price target of $262.00.

The firm cited improved secular growth prospects for the data cloud company under CEO Sridhar Ramaswamy, who took over leadership in February 2024. Morgan Stanley noted that Snowflake has become a "sharper executing organization" across sales, go-to-market, and product engineering areas.

The company has achieved stabilization in product revenue growth in the high 20% range, according to the research firm. Morgan Stanley highlighted accelerated product innovation across Snowflake’s four major opportunity areas: core cloud data warehousing, data engineering, AI/ML platforms, and applications and collaboration.

While still early in AI/ML and application markets, the firm observed that AI-based innovation in Snowflake’s core business, combined with customers’ increasing priority to modernize data infrastructure for AI initiatives, has stabilized the core data warehousing business.

Morgan Stanley also pointed to Snowflake’s execution on its product roadmap and pricing changes, which have led to over $200 million in revenue run rate in data engineering, with the company positioned to capitalize on what the firm estimates as a $300+ billion market opportunity.

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