New York, Jan 29, 2026, 21:20 (ET) — The market has closed.
- On Thursday, Snowflake shares dropped 7.7%, ending the day at $199.37.
- The decline followed a steep selloff in software stocks, with investors wary that AI tools could chip away at subscription software demand.
- Snowflake rolled out an energy-focused data-and-AI package this week, but traders remained fixated on the wider sector sentiment.
Shares of Snowflake Inc fell 7.7% to close at $199.37 on Thursday, dipping as low as $196.82 during the session. The stock had finished Wednesday at $216.00.
Software stocks took a hit as investors weighed whether rapid advances in AI might disrupt traditional software models, particularly subscription-based SaaS. The S&P 500 Software and Services Index plunged 8.7% to its lowest point in nine months. A note from J.P. Morgan highlighted a “vicious cycle” of weak valuations paired with persistent expectations. 1
Big-tech earnings rattled nerves again. Microsoft’s cloud update, paired with heavy AI spending, reignited concerns over potential payback. SAP’s cautious stance on cloud growth and ServiceNow’s slump after earnings sparked a wider selloff in software stocks, market watchers said. “Microsoft disappointed…,” noted John Praveen, managing director and co-CIO at Paleo Leon, flagging fears that AI investments could “eat” into software companies’ core businesses. 2
Snowflake hasn’t released any new financial figures in the past two days. Still, on Tuesday, it rolled out an “Energy Solutions” package targeting power and oil-and-gas sectors. The bundle includes data governance, partner-built tools, and industry datasets. “Data is the control plane for the future of energy,” said Fred Cohagan, Snowflake’s global head of energy, in the announcement. 3
Traders see that contrast as key. Despite launching new products and expanding vertically, Snowflake’s shares have moved like a high-beta software stock, largely driven by the broader sector’s mood.
Snowflake operates a cloud data platform that companies use to store and analyze data, charging customers based on consumption. This setup benefits the company when data workloads increase, but revenue can drop sharply if budgets shrink or usage declines.
The most recent major catalyst for Snowflake came in early December, when the company flagged slower growth in fourth-quarter product revenue and warned that discounts on big, long-term deals might weigh on near-term results. CEO Sridhar Ramaswamy noted those larger contracts “don’t tend to have an immediate impact on revenue.” 4
The risk at hand is that the software downturn worsens into a broader concern: that AI could replace segments of what enterprise software companies offer, prompting clients to slash budgets, renegotiate contracts, or postpone initiatives. If this story gains traction, high-growth stocks could remain volatile, even without fresh company news.
With U.S. markets closed, the next hurdle arrives quickly. Traders will see if the software sell-off spills into Friday and then weighs on next week’s earnings, which should offer fresh clues on cloud demand and AI spending. Snowflake’s upcoming earnings date is pegged for early March, with Yahoo Finance pointing to a post-close report on March 4. 5
