Snowflake Faces Investigations Amid Stock Price Decline
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 24 2024
0mins
Should l Buy SNOW?
Source: Coinmarketcap
Snowflake Inc. experienced a significant decline of 5.00% in regular trading, crossing below its 5-day SMA, as the Nasdaq-100 and S&P 500 also faced losses of 1.02% and 0.53%, respectively.
The company is currently under investigation by Johnson Fistel and Pomerantz LLP regarding compliance with securities laws and potential securities fraud claims. These investigations come after a troubling earnings report on February 28, 2024, which revealed changes in customer behavior and product developments that negatively impacted the company's outlook, leading to a stock price drop of over 18% from $230 to $188.28. This situation raises concerns about investor confidence and the company's future performance.
The ongoing investigations and the recent earnings report have created a challenging environment for Snowflake, potentially affecting its reputation and shareholder trust. Investors will be closely monitoring the developments as the company navigates these legal challenges.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy SNOW?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on SNOW
Wall Street analysts forecast SNOW stock price to rise
33 Analyst Rating
30 Buy
3 Hold
0 Sell
Strong Buy
Current: 182.290
Low
237.00
Averages
278.19
High
312.00
Current: 182.290
Low
237.00
Averages
278.19
High
312.00
About SNOW
Snowflake Inc. is a data cloud and artificial intelligence company. Its platform is the technology that powers the AI Data Cloud, enabling customers to consolidate data into a single source of truth to drive meaningful insights, apply artificial intelligence (AI) to solve business problems, build data applications, and share data and data products. It provides its platform through a customer-centric, and consumption-based business model. Its cloud-native architecture consists of three independently scalable but logically integrated layers across compute, storage, and cloud services. The compute layer provides dedicated resources to enable users to simultaneously access common data sets for many use cases with minimal latency. The storage layer ingests massive amounts and varieties of structured, semi-structured, and unstructured data to create a unified data record. Its ClearQuery platform allows users to rapidly search, explore, and analyze their data using natural language queries.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Anthropic Launches Claude Cowork AI Agent to Transform Mundane Tasks
- AI Tool Launch: Anthropic has introduced the Claude Cowork AI agent designed to simplify mundane tasks such as searching and organizing files, which has raised concerns among investors about the potential disruption to traditional software and digital automation providers.
- Market Reaction: The S&P North American Technology Software Index has plunged over 30% into bear market territory, reflecting investor fears that AI technologies could replace traditional software, although many experts disagree with this outlook.
- Expert Opinions: Nvidia CEO Jensen Huang and Wedbush analyst Dan Ives argue that the software industry is not in decline and that enterprises are unlikely to abandon decades of investment in software and infrastructure, creating buying opportunities for certain tech stocks.
- Stock Analysis: Companies like Microsoft, CrowdStrike, Snowflake, Salesforce, and Palantir are viewed as having strong growth potential in the AI sector, despite their stock prices having fallen from peaks, with analysts remaining optimistic about their future performance.
See More
Anthropic Launches Claude Cowork AI Agent to Transform Business Operations
- AI Tool Launch: Anthropic has introduced the Claude Cowork AI agent designed to simplify mundane tasks such as searching, organizing, and assembling files, although this has raised concerns among investors about the potential disruption to traditional software and digital automation providers.
- Market Reaction: The S&P North American Technology Software Index has plunged over 30%, entering bear market territory, reflecting investor fears that AI technologies could replace traditional software, adversely affecting stock performance in the sector.
- Expert Opinions: Despite the prevailing market pessimism, Nvidia CEO Jensen Huang and Wedbush analyst Dan Ives argue that enterprises are unlikely to abandon their long-term software and infrastructure investments, suggesting that the current sell-off is overdone and may present buying opportunities for high-quality tech stocks.
- Investment Opportunities: As AI technology continues to evolve, companies like Microsoft, CrowdStrike, and Snowflake, which have heavily invested in AI integration and product development, are expected to drive market demand, and despite their stock prices having fallen, they are still viewed as potential investment opportunities.
See More
Johnson Fistel Investigates Snowflake's Compliance with Securities Laws
- Investigation Background: Johnson Fistel is investigating whether Snowflake Inc. complied with federal securities laws, focusing on the potential recovery of investor losses, which could impact the company's reputation and shareholder confidence.
- Stock Price Plunge: Following the financial results announcement on February 28, 2024, Snowflake's stock price dropped from $230 to $188.28, a decline of $41.72 or over 18%, resulting in significant losses for investors.
- Changes in Customer Behavior: During the earnings call, company management discussed changes in customer behavior and the impact of certain product developments, which adversely affected the company's outlook and may lead to poor future performance.
- Legal Services: Johnson Fistel is a nationally recognized shareholder rights law firm specializing in securities fraud and investor rights, having recovered approximately $90.725 million for clients, demonstrating its strength and influence in securities litigation.
See More
JPMorgan: AI Disruption Fears Overstated for Software Sector
- Market Rebound Expectations: JPMorgan believes that while the market's outlook on AI disruption in the software sector is overly pessimistic, certain software companies are demonstrating greater resilience, potentially providing rebound opportunities for investors, especially given the current overly bearish sentiment.
- Extreme Price Volatility: Analysts point out that the extreme price action in software stocks has led to unrealistic expectations regarding AI disruption, which may prompt a rotation back into higher-quality companies, thereby improving portfolio performance.
- AI Profitability Gains: Companies in the S&P 500 that have adopted AI have seen net margins expand by approximately 2 to 3 percentage points more than their peers, indicating that AI technology is already delivering productivity gains and reflecting that corporate adoption is enhancing profitability.
- ETF Performance Decline: The State Street SPDR S&P Software & Services ETF (NYSE:XSW) is down 20.58% year-to-date, illustrating the overall pessimistic sentiment towards the software sector, despite some companies potentially benefiting from AI infrastructure demand.
See More
Pomerantz LLP Investigates Snowflake Securities Fraud Claims
- Investigation Launched: Pomerantz LLP is investigating claims on behalf of investors regarding potential securities fraud or unlawful business practices by Snowflake Inc., indicating significant concerns over corporate governance and investor rights.
- Earnings Report Impact: On February 28, 2024, Snowflake announced its fourth-quarter and full fiscal year 2024 financial results, along with guidance for fiscal year 2025, where management highlighted changes in customer behavior and product developments that negatively impacted the company's outlook.
- Stock Price Decline: Following this news, Snowflake's stock price fell by $41.72, or 18.14%, closing at $188.28 on February 29, 2024, reflecting market apprehension regarding the company's future performance.
- Legal Context: Pomerantz LLP, a prominent firm in securities and antitrust class litigation with over 85 years of experience, is committed to fighting for the rights of victims of securities fraud and corporate misconduct, underscoring its dedication to investor protection.
See More
AI Drives Exponential Growth in Capital Expenditure
- Surge in Capital Expenditure: Top hyperscalers are expected to increase capital expenditures by 70% this year, with Amazon, Alphabet, Meta, and Microsoft planning a combined spending of over $600 billion, indicating a strong commitment to AI infrastructure investment.
- Mixed Market Reactions: Despite the significant increase in capital spending, Amazon and Microsoft's shares have dropped 12% and 16% respectively, while Alphabet's stock is down less than 1% and Meta's has risen by 1%, reflecting investor concerns about the timing of returns on these investments.
- Infrastructure Investment Opportunities: With spending accelerating, investors are drawn to
See More
Anthropic Launches Claude Cowork AI Agent to Transform Mundane Tasks
- AI Tool Launch: Anthropic has introduced the Claude Cowork AI agent designed to simplify mundane tasks such as searching and organizing files, which has raised concerns among investors about the potential disruption to traditional software and digital automation providers.
- Market Reaction: The S&P North American Technology Software Index has plunged over 30% into bear market territory, reflecting investor fears that AI technologies could replace traditional software, although many experts disagree with this outlook.
- Expert Opinions: Nvidia CEO Jensen Huang and Wedbush analyst Dan Ives argue that the software industry is not in decline and that enterprises are unlikely to abandon decades of investment in software and infrastructure, creating buying opportunities for certain tech stocks.
- Stock Analysis: Companies like Microsoft, CrowdStrike, Snowflake, Salesforce, and Palantir are viewed as having strong growth potential in the AI sector, despite their stock prices having fallen from peaks, with analysts remaining optimistic about their future performance.
See More
Anthropic Launches Claude Cowork AI Agent to Transform Business Operations
- AI Tool Launch: Anthropic has introduced the Claude Cowork AI agent designed to simplify mundane tasks such as searching, organizing, and assembling files, although this has raised concerns among investors about the potential disruption to traditional software and digital automation providers.
- Market Reaction: The S&P North American Technology Software Index has plunged over 30%, entering bear market territory, reflecting investor fears that AI technologies could replace traditional software, adversely affecting stock performance in the sector.
- Expert Opinions: Despite the prevailing market pessimism, Nvidia CEO Jensen Huang and Wedbush analyst Dan Ives argue that enterprises are unlikely to abandon their long-term software and infrastructure investments, suggesting that the current sell-off is overdone and may present buying opportunities for high-quality tech stocks.
- Investment Opportunities: As AI technology continues to evolve, companies like Microsoft, CrowdStrike, and Snowflake, which have heavily invested in AI integration and product development, are expected to drive market demand, and despite their stock prices having fallen, they are still viewed as potential investment opportunities.
See More
Johnson Fistel Investigates Snowflake's Compliance with Securities Laws
- Investigation Background: Johnson Fistel is investigating whether Snowflake Inc. complied with federal securities laws, focusing on the potential recovery of investor losses, which could impact the company's reputation and shareholder confidence.
- Stock Price Plunge: Following the financial results announcement on February 28, 2024, Snowflake's stock price dropped from $230 to $188.28, a decline of $41.72 or over 18%, resulting in significant losses for investors.
- Changes in Customer Behavior: During the earnings call, company management discussed changes in customer behavior and the impact of certain product developments, which adversely affected the company's outlook and may lead to poor future performance.
- Legal Services: Johnson Fistel is a nationally recognized shareholder rights law firm specializing in securities fraud and investor rights, having recovered approximately $90.725 million for clients, demonstrating its strength and influence in securities litigation.
See More
JPMorgan: AI Disruption Fears Overstated for Software Sector
- Market Rebound Expectations: JPMorgan believes that while the market's outlook on AI disruption in the software sector is overly pessimistic, certain software companies are demonstrating greater resilience, potentially providing rebound opportunities for investors, especially given the current overly bearish sentiment.
- Extreme Price Volatility: Analysts point out that the extreme price action in software stocks has led to unrealistic expectations regarding AI disruption, which may prompt a rotation back into higher-quality companies, thereby improving portfolio performance.
- AI Profitability Gains: Companies in the S&P 500 that have adopted AI have seen net margins expand by approximately 2 to 3 percentage points more than their peers, indicating that AI technology is already delivering productivity gains and reflecting that corporate adoption is enhancing profitability.
- ETF Performance Decline: The State Street SPDR S&P Software & Services ETF (NYSE:XSW) is down 20.58% year-to-date, illustrating the overall pessimistic sentiment towards the software sector, despite some companies potentially benefiting from AI infrastructure demand.
See More
Pomerantz LLP Investigates Snowflake Securities Fraud Claims
- Investigation Launched: Pomerantz LLP is investigating claims on behalf of investors regarding potential securities fraud or unlawful business practices by Snowflake Inc., indicating significant concerns over corporate governance and investor rights.
- Earnings Report Impact: On February 28, 2024, Snowflake announced its fourth-quarter and full fiscal year 2024 financial results, along with guidance for fiscal year 2025, where management highlighted changes in customer behavior and product developments that negatively impacted the company's outlook.
- Stock Price Decline: Following this news, Snowflake's stock price fell by $41.72, or 18.14%, closing at $188.28 on February 29, 2024, reflecting market apprehension regarding the company's future performance.
- Legal Context: Pomerantz LLP, a prominent firm in securities and antitrust class litigation with over 85 years of experience, is committed to fighting for the rights of victims of securities fraud and corporate misconduct, underscoring its dedication to investor protection.
See More
AI Drives Exponential Growth in Capital Expenditure
- Surge in Capital Expenditure: Top hyperscalers are expected to increase capital expenditures by 70% this year, with Amazon, Alphabet, Meta, and Microsoft planning a combined spending of over $600 billion, indicating a strong commitment to AI infrastructure investment.
- Mixed Market Reactions: Despite the significant increase in capital spending, Amazon and Microsoft's shares have dropped 12% and 16% respectively, while Alphabet's stock is down less than 1% and Meta's has risen by 1%, reflecting investor concerns about the timing of returns on these investments.
- Infrastructure Investment Opportunities: With spending accelerating, investors are drawn to
See More
