Snowflake (SNOW): A Strategic Bet in AI and Government Tech Amid Market Volatility

Snowflake Inc. (NYSE: SNOW) has emerged as a key player in Steve Cohen’s 2025 large-cap stock picks, positioning itself as a prime candidate for significant growth. The inclusion underscores the company’s strategic moves in AI-driven cloud infrastructure, government contracts, and its ability to navigate market turbulence. Let’s dissect why this data cloud leader is capturing the attention of one of Wall Street’s most influential investors.

Government Trust: IL5 Certification Opens New Doors
Snowflake’s recent Impact Level 5 (IL5) Provisional Authorization from the U.S. Department of Defense marks a pivotal milestone. This certification allows Snowflake to serve sensitive data for government agencies, including defense and intelligence sectors.

. This opens doors to lucrative federal contracts, a sector where competitors like Amazon and Microsoft dominate but where Snowflake’s specialized cloud platform could carve a niche.

The authorization not only diversifies Snowflake’s revenue streams but also aligns with the U.S. government’s push to modernize its tech infrastructure. With global spending on government cloud services projected to hit $92 billion by 2027 (Grand View Research), this move positions Snowflake as a critical partner in the AI revolution’s next phase.

AI Adoption: Hard Data on ROI and Growth
A commissioned study by Enterprise Strategy Group reveals 92% of early AI adopters report ROI from their investments, with 98% planning to increase AI spending in 2025. Snowflake’s platform is at the heart of this trend, enabling enterprises to manage and analyze massive datasets efficiently. As AI becomes a core component of business strategies, Snowflake’s cloud-native architecture offers a scalable solution for industries from healthcare to finance.

The data underscores a compelling narrative: companies investing in AI are seeing tangible returns, and Snowflake’s tools are facilitating this transition. This bodes well for SNOW’s subscription-based revenue model, which stands to benefit as enterprises double down on AI.

Stock Performance: Resilience Amid Volatility
Despite macroeconomic headwinds and tech-sector turbulence, Snowflake’s stock has shown surprising resilience. In one recent trading session, SNOW surged 6.9%, outperforming broader indices. However, DA Davidson analysts trimmed their price target to $200, citing economic slowdown risks, even while maintaining a “Buy” rating.

This comparison highlights SNOW’s relative strength: while peers like NVIDIA and AMD faced 25% declines in 2025 due to semiconductor slowdowns, Snowflake’s focus on AI infrastructure and government contracts insulated it from some of the sector’s volatility.

Insider and Institutional Backing
Snowflake’s appeal extends beyond fundamentals to strong insider and institutional support. An insider increased their stake in the company over the past year, signaling confidence. Meanwhile, the average brokerage recommendation (ABR) for SNOW remains a “Buy,” though concerns linger about analyst over-optimism.

Risks and Considerations
No investment is without risks. Snowflake faces intense competition in the cloud space, with giants like AWS and Google Cloud expanding their AI offerings. Additionally, economic slowdowns could delay enterprise AI spending, impacting subscription growth. The lowered price target by DA Davidson also reflects lingering concerns about valuation.

Conclusion: SNOW’s Case for Long-Term Upside
Snowflake’s inclusion in Steve Cohen’s portfolio is no accident. The company’s strategic wins—government contracts, AI-driven ROI, and resilient stock performance—paint a compelling picture of a business poised to capitalize on secular trends.

• Government contracts: The IL5 certification alone could unlock $2.3 billion in annual federal cloud spending (Frost & Sullivan), a market Snowflake is now primed to capture.
• AI adoption: With 98% of firms increasing AI budgets, Snowflake’s platform is a foundational tool for this transition, driving recurring revenue growth.
• Stock resilience: Outperforming peers by +30% YTD (as of 2025) amid tech-sector declines suggests SNOW’s valuation is not yet fully reflecting its strategic advantages.

While risks like economic slowdowns and competition persist, the data supports a bullish stance. For investors seeking exposure to AI and government tech, Snowflake’s combination of innovation, institutional backing, and defensive moats make it a compelling pick for 2025 and beyond.

In a market hungry for growth, SNOW’s fundamentals and Cohen’s seal of approval suggest this is a stock to watch closely.