Snowflake (NYSE:SNOW) Share fell by 10% premarket on Thursday after analysts remained cautious following the company’s second-quarter fiscal 2025 results that beat estimates.

Morgan Stanley maintained its equal-weight rating on Snowflake with a price target of $175, noting that second-quarter results were good but perhaps not enough.

A lower increase in product sales and a further slowdown in growth meant that the second quarter did not have the momentum needed to improve investor sentiment toward Snowflake, said analysts led by Keith Weiss.

They noted that fading headwinds from optimization and the emergence of new product initiatives should support growth, but investors may need more concrete signals to get on board.

In the second quarter ended July 31, the company’s adjusted earnings per share and revenue both exceeded forecasts.

According to analysts, sales growth in the second quarter was solid at 30 percent compared to the same period last year, but the extent of outperformance fell from about 5 percent in the first quarter to around 2 percent in the second quarter.

Third quarter product revenue forecast of 22% year-over-year was slightly above consensus, while fiscal 2025 product revenue growth forecast was raised to 26% year-over-year from 24% year-over-year.

The analysts added that while the increase was encouraging, the slowing growth trajectory is likely not enough to resolve existing bear scenarios around rising competitive intensity. However, they believe that core opportunities in the data warehousing space remain and that new initiatives to capitalize on adjacent opportunities in the generative AI space could emerge in FY2026.

Weiss and his team noted that they are maintaining a balanced weight on the stock and are hoping for a more consistent beat rhythm to become more positively aligned.

Meanwhile, Evercore maintained its outperform rating on Snowflake with a $170 price target, noting that the second fiscal quarter was solid but there are still many unknowns for the second half of the year.

Analysts led by Kirk Materne noted that the company delivered solid results, with product revenue of $829.3 million (+30% year-over-year) beating Evercore/Street forecasts in the 26-27% range. While this was less than hoped, analysts see it as a solid quarter that shows the core business remains healthy and consumption patterns are normalizing somewhat.

Remaining performance obligations (RPO) increased to $5.2 billion (+48%) as Snowflake closed two nine-figure deals in the quarter and the company is confident of having big deals in store for the second half of the year, according to analysts.

Snowflake raised its fiscal 2025 guidance above second-quarter levels, but the implied guidance for the second half still suggests a decline in product revenue as Iceberg headwinds set in. In addition, the new AI products do not offer enough upside to offset the Iceberg (and tiered storage) headwinds in the near term, the analysts added.

In addition, Materne and his team said that current consumption trends are stable (i.e., August), and this has given the company’s management the confidence to raise guidance for the third fiscal quarter. However, until subscription revenue bottoms out (ideally in the fourth or first fiscal quarter), analysts expect the stock to remain in a tug-of-war between bulls and bears near current levels.

Analysts continue to believe the risk-reward ratio is trending higher given new AI products coming online in fiscal 2026 and a more normal optimization environment, but for now, Snowflake is likely still in the penalty box.

Barclays maintained its equal-weight rating on Snowflake but lowered the price target to $142 from $146.

Analysts said they were not sure whether the stock price reaction to the company’s second-quarter results was fair.

They noted that the 30% year-over-year product growth was slower than the 33%-34% level that Barclays has seen over the past two quarters. However, despite any concerns that accompany these results, Barclays considers the 30% level and the increased guidance to be very respectable, especially given the lower valuation, the analysts added.