Snowflake Inc (NYSE:SNOW) shares are trading lower Friday afternoon, extending losses following a mixed market reaction to its third-quarter financial results released earlier this week. Here’s what investors need to know.
- Snowflake shares are sliding. Why is SNOW stock falling?
What To Know: Despite beating analyst estimates for both revenue and earnings, the data cloud giant is facing selling pressure driven by guidance concerns and decelerating growth, falling some 14% to the $226-level since Wednesday’s after-hours session.
For the third quarter, Snowflake reported total revenue of $1.21 billion, a 29% increase year-over-year, surpassing the consensus estimate of $1.18 billion. The company also highlighted rapid adoption of its artificial intelligence tools, announcing it hit a $100 million annualized AI revenue run-rate a quarter ahead of schedule.
CEO Sridhar Ramaswamy emphasized that this milestone reflects “real enterprise workloads” rather than hype, noting that AI products influenced 50% of new bookings during the quarter.
However, investors appear focused on the company’s softer margin outlook. Snowflake issued fourth-quarter operating margin guidance of 7%, a decrease from the 11% reported in the third-quarter.
Additionally, analysts noted that product revenue growth has dipped below 30%, which may have disappointed investors with elevated expectations heading into the earnings print.
Despite the sell-off, Wall Street sentiment remains resilient. Firms including Cantor Fitzgerald and Goldman Sachs raised their price targets, citing a massive 37% jump in remaining performance obligations to $7.88 billion.
Benzinga Edge Rankings: Benzinga Edge data highlights a strong Momentum score of 73.63 for the stock, contrasting with a lagging Growth score of 17.76.
SNOW Price Action: Snowflake shares were down 2.75% at $228.31 at the time of publication on Friday, according to Benzinga Pro data.
From a technical perspective, Snowflake is currently trading approximately 9.7% below its 50-day moving average, which could signal a bearish trend in the short term. Conversely, the stock is trading about 10.1% above its 200-day moving average, indicating a more favorable long-term outlook.
This divergence between the short-term and long-term moving averages suggests that while the stock may be experiencing short-term weakness, it still retains some strength over a longer horizon.
Read Also: Meta AI Becomes Real-Time News Hub With New Media Partnerships
How To Buy SNOW Stock
Besides going to a brokerage platform to purchase a share – or fractional share – of stock, you can also gain access to shares either by buying an exchange traded fund (ETF) that holds the stock itself, or by allocating yourself to a strategy in your 401(k) that would seek to acquire shares in a mutual fund or other instrument.
For example, in Snowflake’s case, it is in the Information Technology sector. An ETF will likely hold shares in many liquid and large companies that help track that sector, allowing an investor to gain exposure to the trends within that segment.
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