Investing.com-- Wedbush upgraded its rating on software firms Snowflake and Elastic , citing increased optimism over their exposure to the rapidly growing artificial intelligence industry, especially on an enterprise level.
Webush upgraded both Snowflake Inc (NYSE:SNOW) and Elastic NV (NYSE:ESTC) to Outperform from Neutral. The brokerage also hiked its price targets on software majors Palantir Technologies Inc (NYSE:PLTR) and Salesforce Inc (NYSE:CRM).
For Snowflake, Wedbush said it expects to see “marked improvement” in product revenues before an AI-fueled 2026. The cloud firm is in a “sweet spot” to benefit from AI use cases in the next 12 to 18 months, Wedbush said.
For Elastic, Wedbush said the cloud firm was likely to benefit from increased demand for its platform approach to cloud computing, especially with more customers looking to pivot from legacy vendors.
Cloud firms are expected to benefit from the rapidly growing computational requirements of AI programs, especially given that most AI users will be unwilling to set up their own AI server infrastructure.
Both Snowflake and Elastic clocked strong earnings last week, driving their stock prices to multi-month highs.
Wedbush hiked its price target on Palantir to $75 from $57, citing increased confidence in the firm’s AI as a platform strategy, as well as exposure to increased use cases for AI. The stock is rated as Outperform.
For Salesforce, Wedbush hiked its price target to $375 from $325 and maintained the stock at Outperform. The brokerage said it saw increased demand for Salesforce’s offerings, especially on the AI front.