Snowflake Q3 Beats But Shares Drop: Can Cloud Data Giant Bounce Back From 8% Slump?
Snowflake: Snowflake, the cloud-data analytics firm long considered a bellwether for enterprise data and AI-cloud adoption, posted a strong third-quarter 2025 performance yet its stock tumbled nearly 8–9% in pre-market trading after issuing cautious forward guidance.
Q3 Results: Solid but Signals Mixed Sentiment
• Snowflake reported $1.21 billion in total revenue, up about 29% year-over-year, narrowly beating analyst estimates of $1.18 billion.
• Its product revenue rose to roughly $1.16 billion, also up 29% from last year.
• On customer strength: the company now counts 688 customers with trailing 12-month product revenue over $1 million, and serves 766 Forbes Global 2000 enterprises.
• Remaining performance obligations — a marker for future booked revenue — jumped 37% year-over-year to $7.88 billion, underscoring long-term demand and enterprise adoption.
Despite these solid metrics, investor optimism took a hit after Snowflake forecast Q4 product revenue growth of around 27%, slightly down from the 29% growth seen this quarter — a softer growth trajectory than many had hoped.
Snowflake continues to double down on its AI and cloud strategy. The firm recently announced a $200 million multi-year partnership with Anthropic, aiming to integrate Claude AI models into its platform — a move that reflects rising enterprise demand for AI-powered data analytics.
Analysts, including from brokerage firm TD Cowen, remain bullish: TD Cowen raised its price target for SNOW to $300 from $275, citing strong AI momentum, durable net revenue retention, and the growing enterprise client base.
Why Did Shares Drop And Could This Be a Buying Opportunity?
Markets sold off shares on what many see as a cautious outlook. Some key concerns:
• The guidance suggests slower near-term growth, which worries growth-focused investors.
• Valuation remains high: SNOW trades at a significant premium compared to many peers, even as competition intensifies in cloud data and AI services
• However, long-term supporters argue that this dip could create a buying window thanks to solid fundamentals, expanding AI enterprise adoption, and a robust long-term contract backlog.
What to Watch Next
• Q4 revenue and how well the company converts its remaining performance obligations into realized revenue.
• Uptake and commercial performance of AI-integrated services like Snowflake + Anthropic.
• Competitive pressure from other cloud-data/AI players — and how Snowflake differentiates itself.
• Broader macroeconomic factors: cloud-spend budgets, enterprise IT trends, and interest-rate policies that might impact tech valuations.
Snowflake’s Q3 results show the company remains a strong player in the cloud-data and enterprise AI market. But the market’s tepid reaction driven by cautious Q4 guidance serves as a reminder that even top-tier tech firms remain vulnerable to shifting investor sentiment. For long-term investors focused on AI and data-driven enterprise solutions, today’s dip might be a moment to reassess or even accumulate.
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