Snowflake, Elastic Poised For AI Revolution Gains, Analyst Upgrades The Stocks

Core Insights - Wedbush Securities analyst Daniel Ives has increased optimism regarding the AI revolution's impact on the software sector, particularly through generative AI adoption and large language model launches [1][2]. Company Summaries - Snowflake Inc (SNOW): Upgraded to Outperform with a price target raised to $190, supported by a 30x long-term free cash flow estimate. The company is expected to benefit significantly from the rise in AI use cases over the next 12 to 18 months [3][4]. - **Elastic NV (ESTC)**: Upgraded to Outperform with a new price target of$135, based on an 8x fiscal year 2026 enterprise value-to-revenue ratio. The company is strategically aligned with enterprises transitioning to next-generation platforms, with customers moving from legacy vendors to Elastic's AI-powered solutions [4][5]. - Palantir Technologies Inc (PLTR): Price target raised from $57 to$75, leveraging a 38x long-term free cash flow target. The company's AIP strategy is expected to drive demand as enterprises recognize the value of AI across various use cases [5]. - Salesforce Inc (CRM): Price target increased from $325 to$375, citing a 28x long-term EBITDA valuation. Rising customer enthusiasm for Salesforce's AI-integrated products is anticipated to drive the next wave of growth for the company [6]. Industry Overview - The software sector is entering an inflection point, with projections of $2 trillion in AI spending in the coming years. Enterprises are expected to adopt AI at scale by 2025, positioning companies like Snowflake, Elastic, Palantir, and Salesforce to benefit from this technological revolution [7].