Forget Nvidia: Will this young artificial intelligence (AI) company outperform in 2024?

In the booming world of artificial intelligence (AI), a young company stands out: with promising innovations and revolutionary potential, it is already attracting the interest of experts. So, could it surpass the giant Nvidia by 2024?

The rise of Snowflake

It is undeniable that Nvidia and theartificial intelligence (AI) have been the protagonists of the stock market during the first six months of 2024. The growing demand for Nvidia’s AI chips has propelled the stock to new heights, transforming the company into a multi-billion dollar entity. However, what goes up must come down, or at least slow down. It is therefore legitimate to start looking for the next winner in the market. A company that deserves your attention is Snowflake, despite a drop of more than 35% in its shares since January.

Snowflake’s tumultuous beginnings

Having gone public in late 2020, Snowflake got off to a flying start thanks to a euphoric market for growth stocks. Snowflake’s cloud platform allows customers to securely store, search and integrate their data with various third-party applications. Even Warren Buffett got involved through Berkshire Hathaway. However, rising interest rates in 2022 have tempered this frenzy, leading to a significant reduction in Snowflake’s valuation.

A promising future

Snowflake hasn’t been perfect, far from it. The company’s revenue growth has slowed significantly compared to 2020. However, with 32% year-over-year growth last quarter, Snowflake still ranks among the fastest-growing companies in the market. Year-over-year revenue has increased six-fold since the start of 2021, with a dramatic increase in customer numbers from 3,554 to 9,822.

Potential of AI for Snowflake

If you believe AI will become crucial to our society over the next decade, Snowflake could play a key role. AI requires data to train, and Snowflake’s platform allows this data to be structured, searched, and supplemented through third-party marketplaces. This specificity makes Snowflake an ideal platform for companies looking to optimize their data for AI.

With a net revenue retention rate of 128%, it is evident that customers are investing heavily in the platform once they adopt it. Snowflake may no longer see triple-digit growth, but the path is open for years, if not decades, of double-digit growth.

The signs of a reversal?

For a stock to start rising, there needs to be increased demand for the shares. Snowflake recently changed CEO, appointing Sridhar Ramaswamy, former vice president of AI. This indicates a greater orientation towards AI. The consumption-based pricing model slowed growth as companies tightened budgets, but the AI ​​boom could reverse the trend.

There was a reversal in revenue growth last quarter. A continuation of this trend could reignite investor interest and boost Snowflake’s stock, currently at a lower valuation than before.

In short, Snowflake has all the elements for a strong comeback and could become an even bigger success story than Nvidia in 2024. For long-term investors, this company represents an opportunity not to be missed.

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