United Investment Limited - Is Snowflake a Buy in the Face of Cloud and AI Growth Concerns?

CENTRAL, Hong Kong - Oct. 20, 2023 - PRLog -- One source that is worrying for SNOW stock has been a slowing in cloud computing growth.

Snowflake (SNOW) is a company that delivers data analytics and management software for cloud computing platforms. The organization is transforming into a cloud data management platform. After reversing earlier gains, SNOW stock is up only 9% in 2023. The Nasdaq composite is up 29% as a result of the excitement around generative AI.

Snowflake reduced its full-year fiscal 2024 projection after it released April-quarter earnings. Snowflake reduced their target for product sales growth to 34% to $2.6 billion from 44% to 45% before.

"Consumption challenges, while improving, are still weighing on expansion in the core data warehouse business," according to a recent analysis by Bank of America analyst Brad Sills. "Snowflake's unique consumption pricing model provides a key competitive advantage, though it also presents a higher degree of exposure to a still challenging IT spending environment."

In June, rival Databricks paid $1.3 billion for generative AI firm MosaicML. Databricks raised approximately $500 million in September at a $43 billion value. Nvidia (NVDA), one of the hottest AI stocks, was among the investors.

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