Snowflake Stock Dumps 25%: Value Trap or AI Play?

Gotrade News - Snowflake stock has been sliding, down roughly 25% already in 2026. The drop comes as investors start questioning the valuation of this AI data specialist amidst cooling growth numbers.

Management reported a deceleration in product revenue growth, sparking fears that the short-term momentum might be fizzling out. The market is now waiting to see if heavy AI investments will actually translate into GAAP profits anytime soon.

Key Takeaways:

• Product revenue grew 29% year-over-year, a slowdown from the previous quarter's 32% pace.

• Remaining Performance Obligations (RPO) jumped 37% to $7.88 billion, hinting at strong future demand.

• GAAP net losses swelled to over $1 billion, weighed down by heavy stock-based compensation.

Growth Hitting the Brakes?

Market sentiment towards Snowflake feels pretty gloomy compared to Palantir, which is seeing momentum accelerate. According to data from The Motley Fool, Snowflake's product revenue growth cooled off to 29% in the fiscal third quarter.

Management also issued guidance suggesting further deceleration heading into Q4. This has investors wondering if the company can maintain its high-growth status in an increasingly crowded data platform market.

Despite the stock taking a hit, the underlying demand actually looks solid. CEO Sridhar Ramaswamy noted that their enterprise AI agent product is seeing the fastest adoption ramp in the company's history.

Total Remaining Performance Obligations (RPO) climbed 37% year-over-year, hitting $7.88 billion. This is a strong signal that enterprise customers are still locking in long-term commitments to the data cloud platform.

The Profitability Red Flag

The biggest weight dragging the stock down is likely the lack of consistent profitability. Financial reports show a GAAP net loss exceeding $1 billion for the nine months ended October 31.

Stock-based compensation remains a massive expense, keeping the company in the red even as adjusted free cash flow improves. Institutional investors seem to be staying on the sidelines until there’s a clearer path to GAAP profitability.

Ready to Buy the Dip?

This correction in Snowflake's price could be a solid entry point if you're bullish on the future of AI data infrastructure. You can own a slice of this global tech giant starting with just $1.

Gotrade is fully integrated with TradingView, letting you chart the price action in real-time before making your move. Don't miss out on this potential discount in the US tech sector.

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Reference:

• The Motley Fool, Here's 1 AI Stock Down About 25% Already in 2026. Is It a Buy?. Diakses pada 5 Februari 2026

• Featured Image: Unsplash