Snowflake (SNOW) shares down 39% YTD due to competition and macroeconomic challenges

From Nasdaq: 2024-08-05 12:01:00

Snowflake (SNOW) shares have dropped 39% year-to-date, underperforming the Zacks Internet Software industry and Computer & Technology sector. SNOW faces competition from Databricks, pricing pressure, and rising GPU costs due to difficult macroeconomic conditions. Lowered 2025 margin view indicates slower growth and reduced margins. Stock valuation remains stretched.

Despite challenges, Snowflake maintains a strong partner base, collaborating with tech giants like Amazon, Microsoft, and NVIDIA. The company has introduced new capabilities and features, such as Arctic, Iceberg tables, and Polaris Catalog, to enhance its platform and drive long-term growth. Partnerships with industry leaders boost Snowflake’s AI and data capabilities.

Investors need to consider the risk associated with Snowflake’s modest growth outlook and premium valuation. The stock is trading below the 50-day moving average, signaling a bearish trend. With a Zacks Rank of #3 (Hold), it may be wise to wait for a more favorable entry point. While cautious in the near term, Snowflake’s long-term prospects look promising with its expanding portfolio and strong partnerships.



Read more at Nasdaq: Snowflake (SNOW) Slips 39% YTD: Is a Rebound on the Horizon?