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Snowflake: AI Evolution Overplayed

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  • Snowflake Inc.'s stock surged post-FQ3 earnings but remains overvalued based on limited AI revenue and decelerating growth.
  • The company is only targeting 23% YoY growth in FQ4 despite the investor excitement.
  • The stock's rally is driven by AI hype and multiple expansions, pushing the valuation similar to pre-IPO Databricks with up to double the growth rates.
  • Investors should consider cashing out of Snowflake due to downside risks on a stock trading at 15x FY26 revenues, especially as Snowflake's growth continues to point to decelerating.
After a rough patch that saw Snowflake, Inc. (NYSE:SNOW) shares collapse over 50% from the yearly highs, investors came rushing back into the stock following a promising FQ3 earnings report. The AI data company highlighted some bright spots in the quarter to overcome past issues with data security. My investment thesis remains Bearish on the stock after the big rally back up to $175 and the related rich valuation.


Read the full article at Seeking Alpha. 

Disclosure: No position mentioned. Please review the disclaimer page for more details. 


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