Why Snowflake Stock Jumped Almost 12% in May
Shares of data company Snowflake (NYSE: SNOW) jumped 11.7% in May, according to data provided by S&P Global Market Intelligence. That easily beat the 0.25% return for the S&P 500 index. But the ride to this market-beating gain was anything but smooth.
During the first few weeks of May, Snowflake stock went up by as much as 24%. It appears the company benefited from Wall Street's new favorite buzzword: artificial intelligence (AI). Indeed, Stifel analyst Brad Reback upgraded Snowflake stock to a buy rating early in the month, in part citing the rise of generative AI as a business tailwind, according to The Fly.
AI works by processing huge amounts of data. And Snowflake's platform is both a place to store data and use data, so the AI angle does make sense. Moreover, AI can potentially boost consumption of Snowflake's products. And the company uses a consumption-based business model, meaning it makes more money the more its software is used.
Source Fool.com
