Snowflake is an up-and-coming player in the artificial intelligence world that’s here to win, according to D.A. Davidson. Analyst Gil Luria initiated the stock with a buy rating. His $200 price target suggests 25.1% upside from where shares closed Thursday. The cloud data provider has gained nearly 11.4% year to date, but it’s down 9.2% this quarter. “Even after cloud optimization efforts that plagued software companies this year, we view Snowflake in an advantageous position,” Luria wrote in the Thursday note. “They maintain best-in-class growth rates and are positioned well as a cloud data company to benefit from increasing demand for artificial intelligence.” The company’s expansion into the machine learning space is a “new area of significant growth potential,” according to Luria. D.A. Davidson proprietary developer data indicates that activity surrounding machine learning workloads is on pace to grow 31% in the third quarter of 2024, which Luria said is contributing to Snowflake’s growth. “With recent acquisitions and artificial intelligence focused products becoming generally available in the next fiscal year, we believe that Snowflake has the capability to capture new avenues of growth in the near and long-term,” Luria said. Snowflake announced in late June that it is partnering with Nvidia to provide businesses with a path to create customized generative AI applications using their own proprietary data, with the Snowflake Data Cloud platform. Although the stock has seen declines recently, Luria said its deceleration has been priced in, noting that 2023 has proven difficult to be selling software. Snowflake’s guidance for the fourth quarter of 2023 suggests the company’s cloud optimization efforts will stabilize in the back half of fiscal 2024, he added. “A rising generative AI tide has lifted all boats, however, we believe that Snowflake is one of few companies with a meaningful opportunity to capitalize on the increasing demand for artificial intelligence,” the analyst said. — CNBC’s Michael Bloom contributed to this report.