Snowflake stock underperformed due to premium valuation, missed earnings, and increased competition

From Nasdaq: 2025-01-27 00:32:25

Snowflake stock (NYSE: SNOW) has underperformed in the software space, declining by 11% in the past year compared to the S&P 500’s 28% gain. Reasons include premium valuation, missed earnings estimates, and increasing competition from Databricks, Google, and Microsoft. Snowflake remains a key player in cloud data warehousing and AI, with innovative product launches and improving margins.

Despite Snowflake’s volatility, the Trefis High Quality Portfolio has outperformed the S&P 500 over the last 4 years. Uncertainty around rate cuts and geopolitical tensions may impact Snowflake’s performance in the future. Trefis estimates Snowflake’s valuation at $180 per share, slightly above the current market price.

In January 2025, Snowflake’s MTD return is 15%, while its return since the start of 2024 is -11%. Over the total period from 2017-2025, Snowflake’s return is -37%, compared to the S&P 500’s 172% return. The Trefis Reinforced Value Portfolio has provided consistent returns with less risk compared to Snowflake’s volatility.



Read more at Nasdaq: Why Snowflake Stock Has Underperformed