Citi has updated its quantitative model for technology equities following Snowflake Inc. (SNOW) reporting a 68% year-over-year increase in AI-driven data cloud revenue during Q4 2025. The adjustment reflects growing confidence in AI-infused data infrastructure as a core growth engine.
- Snowflake (SNOW) generated $378 million in AI-related revenue in Q4 2025, up 68% YoY.
- Citi revised its tech model to reflect AI-driven data infrastructure as a primary growth vector.
- SNOW’s enterprise customer acquisition rose 31% in Q4 2025, with AI use cases as a major driver.
- Citi upgraded SNOW from Neutral to Buy based on improved margin and retention metrics.
- Microsoft (MSFT) and NVIDIA (NVDA) received 5% and 7% revenue forecast increases, respectively.
- AI-optimized data platforms now projected to contribute 42% of cloud revenue growth in 2026.
Citi has revised its predictive framework for cloud and AI stocks, citing Snowflake Inc. (SNOW) as a pivotal indicator of sector-wide momentum. The investment bank noted that SNOW recorded $378 million in AI-related revenue in the fourth quarter of 2025, up from $226 million in the same period the prior year, marking a 68% year-over-year growth. This performance, driven by expanded adoption of Snowpark and Snowflake’s AI Data Cloud, exceeded internal expectations and prompted a reevaluation of AI infrastructure valuations. The bank’s updated model now assigns a higher weight to companies with integrated AI data platforms, particularly within the cloud infrastructure and analytics space. SNOW’s 31% increase in enterprise customer acquisition during Q4—driven largely by AI use cases—has been factored into the new framework. Citi now projects that AI-optimized data platforms will account for 42% of total cloud revenue growth in 2026, up from 28% in 2024. As a result, Citi has upgraded its rating on Snowflake from Neutral to Buy, citing improved margin expansion potential and stronger customer retention in AI-heavy verticals. The update also influenced the firm’s outlook for Microsoft (MSFT) and NVIDIA (NVDA), where Citi raised near-term revenue forecasts by 5% and 7%, respectively, due to their deep integration with AI data ecosystems. These changes are expected to impact asset allocation strategies across institutional portfolios focused on cloud and AI innovation.