The S&P 500 increased 24% last year, and it has already advanced another 4% this year. Given all that growth, some stocks are likely trading at expensive valuations. But not all stocks. For instance, Wall Street analysts at Morgan Stanley and Jefferies Financial Group see sizeable buying opportunities in Snowflake (NYSE: SNOW) and Sea Limited (NYSE: SE).
Keith Weiss at Morgan Stanley has a bull-case price target of $380 per share on Snowflake, implying a 78% upside from its current price. And Thomas Chong at Jefferies has a price target of $80 per share on Sea Limited, implying 90% upside from its current price.
Investors should never rely too heavily on short-term forecasts, especially when those forecasts are coming from individual analysts. But Snowflake and Sea Limited warrant consideration. Let’s take a closer look at these two growth stocks.
1. Snowflake
Snowflake impressed Wall Street with its third-quarter report, beating expectations on the top and bottom lines. Customers increased 24% year over year to 8,907, and the average customer spent 35% more. Revenue rose 32% year over year to $734 million, and non-GAAP net income more than doubled to reach $90 million. The company is well-positioned to maintain that momentum as businesses prioritize IT spending on analytics and artificial intelligence (AI).
Snowflake helps businesses turn big data into smart decisions. Its platform supports multiple workloads, including data ingestion, transformation, storage, and analytics, making it a more efficient option for companies that currently rely on multiple-point solutions. Snowflake is also cloud-neutral, meaning its platform runs across all three major public clouds. That gives the company an edge over Amazon and Microsoft.
The Snowflake Marketplace also supports data sharing, creating a network effect that makes the Snowflake cloud increasingly attractive as more customers upload data. That could be a substantial tailwind as businesses invest in AI, simply because data is a limiting factor in the training of machine learning models. Indeed, CEO Frank Slootman says,…
..
