SNOW - Snowflake: Meltdown Offers A Warning For AI Overhype
2024-03-06 13:30:00 ET
Summary
- Snowflake Inc. investors have suffered a deserved hammering as SNOW lost over 30% in the past two weeks.
- Ex-CEO Frank Slootman's “sudden” departure and withdrawal of long-term product revenue guidance likely stunned the market.
- SNOW's expensive valuation behooves flawless execution and guidance. Any perceived weakness is unwelcome.
- Notwithstanding an improved risk/reward profile, I explain why I urge investors to remain on the sidelines.
I cautioned Snowflake Inc. ( SNOW ) investors in my previous update in early December 2023 to avoid chasing it further, as I downgraded it to a Hold (Neutral). Even as SNOW continued its upward climb before topping out in mid-February, the significant losses over the past two weeks offer a stark reminder about chasing unsustainable hype....
Snowflake: Meltdown Offers A Warning For AI Overhype