What Happened?
Shares of cloud data platform provider Snowflake (NYSE: SNOW) jumped 4% in the morning session after the company reported fourth-quarter results that beat revenue expectations and showed a substantial increase in cash flow, outweighing a mixed outlook.
Snowflake's revenue for the quarter reached $1.28 billion, surpassing forecasts of $1.26 billion and marking a 30.1% increase from the previous year. The company also posted an adjusted earnings per share of $0.32, which was higher than the $0.27 analysts had projected. A key factor in the positive market reaction was the company's free cash flow margin, which surged to 59.6%, a significant improvement from the same quarter last year. However, the report was not entirely positive. The company's guidance for the upcoming first quarter pointed to a slowdown in product revenue growth. Furthermore, Snowflake reported a GAAP operating loss for the quarter. Despite the weaker forecast, investors appeared to focus on the strong current performance and enhanced efficiency.
After the initial pop the shares cooled down to $169.28, down 0.4% from previous close.
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What Is The Market Telling Us
Snowflake’s shares are very volatile and have had 20 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 3 days ago when the stock dropped 9.1% on the news that the White House announced plans to raise global tariffs to 15%. The major stock indexes, including the S&P 500 and Nasdaq, also sank amid the uncertainty. The downturn came after President Trump announced the tariff increase in a post on Truth Social, stating the new rate would be effective immediately on countries that had been, in his words, "'ripping' the U.S. off for decades." The move sparked concern among trade partners, with Europe warning that such tariffs could put U.S. trade deals at risk. The market-wide slide reflected investor worries about the potential impact of these new global trade policies Additionally, investor concerns about disruption in the software industry from advancements in artificial intelligence (AI) continued to cause a sector-wide sell-off. The market started the week with a more cautious tone, reflecting this unease. The current wave of AI development was seen as having similar traits to previous tech cycles, marked by genuine innovation but also by exuberant expectations and sharp market reactions to new developments.
Snowflake is down 21.9% since the beginning of the year, and at $169.28 per share, it is trading 38.9% below its 52-week high of $277.14 from November 2025. Investors who bought $1,000 worth of Snowflake’s shares 5 years ago would now be looking at an investment worth $652.24.
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