Wedbush upgrades Snowflake and Elastic as analyst cites growing importance of software in AI. (Tada Images/Shutterstock.com)
Snowflake stock and shares of Elastic were upgraded Sunday by a Wall Street analyst who cited an emerging battlefield in AI: software.
Wedbush analyst Daniel Ives raised his ratings for the software companies from to outperform from neutral which he said reflects an "increased bullishness" on the AI trend.
The upgrades reaffirmed Ives' upbeat view of what he called an AI Revolution which he argues is entering a new phase.
The AI frenzy has recently focused mainly on semiconductor giant Nvidia which has emerged as "the only game in town with their chips, the new gold and oil," he said in a client note.
"Now it's time for the broader software space to get in on the AI Party as we believe the use cases are exploding (and) enterprise consumption phase is ahead of us beginning in 2025," Ives wrote.
"The AI Software era is now here in our view," he said.
Snowflake and Elastic are poised to play key roles in the new phase, he argued.
Snowflake "is in the sweet spot to benefit from AI use cases over the next 12 to 18 months," Ives said in a client note. The cloud data management and analytics company last week reported third-quarter results that beat Wall Street estimates. Wedbush set a new price target of $190.
Ives also offered an upbeat take on Elastic which he said "looks to capitalize on growing AI demand for its platform approach."
"This is the right time at the right place for Elastic," he wrote. Wedbush set a new price target of $135.
Elastic, which offers search software and data software tools for enterprises, last week also posted strong results that eased recent investor worries.
Elastic stock surged 14.8% on Friday, while Snowflake slipped 2.3%.
Wedbush also raised its price targets for two other AI stocks, Salesforce and Palantir.
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