Snowflake (SNOW) Eyes AI Data Cloud Expansion with Strategic Acquisition of Observe

Snowflake Inc. (NYSE:SNOW) is one of the best stocks to buy right now.

Snowflake (SNOW) Eyes AI Data Cloud Expansion with Strategic Acquisition of Observe

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On January 8, 2026, Snowflake Inc. (NYSE:SNOW) announced its acquisition of Observe, a leader in AI-powered observability. The move marks a strategic expansion of the company’s AI Data Cloud, enabling enterprises to combine telemetry and business data and apply analytics and agentic AI to troubleshoot systems up to ten times faster. Observe helps companies detect anomalies early and fix production issues efficiently, thanks to its AI Site Reliability Engineer (SRE), which integrates logs, metrics, and traces into a unified context graph.

Furthermore, the platform is built on open standards like Apache Iceberg and OpenTelemetry. This feature allows the platform to support large-scale, cost-effective retention of telemetry data, addressing a growing need as AI-driven applications generate unprecedented data volumes. Management hailed the move, citing the $51.7 billion IT operations management market that it plans to address.

Meanwhile, analyst sentiment surrounding Snowflake Inc. (NYSE:SNOW) remains mixed, with Barclays downgrading the stock to an ‘Equal Weight’ on January 12. The firm cited the 42% rally in 2025, describing the current valuation as stretched. On the other hand, Goldman Sachs initiated coverage of the stock on January 12 with a ‘Buy’ rating and $286 price target, pointing out AI adoption and data platform modernization as key long-term growth catalysts.

Snowflake Inc. (NYSE:SNOW) is focused on providing cloud-native data warehousing through its Data Cloud. It enables secure, scalable AI, analytics, and data applications development across storage, compute, and cloud services globally.

While we acknowledge the potential of SNOW to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than SNOW and that has 100x upside potential, check out our report about this cheapest AI stock.

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