Snowflake Inc. (NYSE: SNOW) has just delivered another strong quarter on the numbers—but the stock is under pressure as investors digest slower growth guidance, rich valuation and a flood of new AI announcements.
As of intraday trading on December 10, 2025, Snowflake shares are changing hands around $217.30, down roughly 2% on the day and well below where they traded before last week’s earnings, leaving the company with a market capitalization in the mid‑$70 billion range. [1]
At the same time, Snowflake has inked a $200 million AI partnership with Anthropic, doubled sales through AWS Marketplace to over $2 billion, and continues to post high‑20s percentage growth in product revenue. [2]
Here’s a detailed look at the latest news, analyst views and what the current setup could mean for Snowflake stock heading into 2026.
Snowflake Stock Price Snapshot on December 10, 2025
- Price: ~$217.30
- Intraday range: $216.74 – $222.85
- Move vs. prior close: about –$5.30 (–2.4%)
- Recent options flow: Large bullish call “sweeps” at the $220 strike expiring December 12 point to some near‑term speculative upside bets. [3]
According to Simply Wall St, despite the latest pullback of roughly 13% over the past week and about 14% over the last month, Snowflake shares are still up over 40% year‑to‑date and more than 30% over the last 12 months, underscoring just how strong the 2025 run has been. [4]
In other words: this is still a high‑beta, high‑expectation AI infrastructure play—one where even “good” quarters can trigger sharp drawdowns if guidance or sentiment disappoints.
Q3 FY 2026 Results: Big Beat on Revenue and Earnings
Snowflake reported results for its fiscal Q3 2026 (quarter ended October 31, 2025) on December 3:
- Total revenue: about $1.21 billion, ahead of analyst expectations around $1.18–$1.19 billion
- Product revenue (key metric): roughly $1.16 billion, up about 29% year over year
- Non‑GAAP EPS:$0.39, beating the consensus of $0.31 by more than 25%
- Non‑GAAP product gross margin: about 76%
- Non‑GAAP operating margin: roughly 11%
- Customers: 615 new customers added, with product revenue from existing customers still growing strongly
[5]
Management also highlighted continued success in AI‑driven workloads: roughly half of new bookings now tie to AI use cases, and almost a third of deployed customer use cases incorporate AI. [6]
On the surface, this is exactly what growth investors want to see:
strong top‑line expansion, margin improvement and accelerating AI engagement.
So why did the stock sell off?
Guidance Shock: Slower Growth and Discounting Spook the Market
The main reason Snowflake slid after earnings has very little to do with the quarter just reported—and everything to do with what comes next.
For Q4, Snowflake guided:
- Product revenue:$1.195–$1.20 billion, implying about 27% growth year‑on‑year, down from 29% in the October quarter
- Full‑year FY 2026 product revenue: raised to around $4.446 billion, representing roughly 28% growth
[7]
On December 4, Reuters reported that Snowflake shares slumped about 11% after this guidance, as investors fixated on the slowdown in product revenue growth—especially given heavy discounts on large, long‑term deals. [8]
Key points behind the market’s negative reaction:
- Management acknowledged offering more favorable pricing for bigger and longer‑duration contracts, which boosts backlog but depresses near‑term revenue recognition. [9]
- Net revenue retention slipped to around 125%, down a couple of points from the prior year, suggesting customers are still expanding but are pushing harder on price. [10]
- Snowflake trades at far higher valuation multiples than peers—Reuters pegs it at about 165x forward earnings, versus roughly 66x for Datadog and 76x for MongoDB—so any hint of deceleration hits the stock disproportionately hard. [11]
A separate analysis at 24/7 Wall St. framed Snowflake’s guidance as a potential early sign of an “AI winter,” noting that enterprises are demanding steeper discounts and are increasingly scrutinizing the return on their AI investments. [12]
Put simply: the bar was very high, and Snowflake cleared it on the quarter—but not on the outlook.
AI and Cloud Partnerships: Anthropic and AWS Turn Up the Heat
Offsetting some of the guidance angst is a wave of major AI and cloud partnership news.
$200 Million Anthropic Deal: Agentic AI Inside the Data Cloud
On December 3, 2025, Anthropic and Snowflake announced a multi‑year, $200 million partnership. Highlights: [13]
- Anthropic’s Claude models will be available directly inside Snowflake for more than 12,600 global customers across AWS, Google Cloud and Microsoft Azure.
- The partnership includes a joint go‑to‑market program focused on “agentic AI”—AI agents capable of multi‑step analysis over governed enterprise data.
- Snowflake already processes trillions of Claude tokens per month via its Cortex AI capabilities, and internally uses Claude to boost developer productivity and sales execution.
This deal reinforces Snowflake’s positioning as the “AI Data Cloud”—not just a data warehouse, but the place where enterprises run, govern and operationalize large‑scale AI.
AWS Re‑Invent 2025: Doubling Marketplace Sales and Deeper Integration
At AWS re:Invent 2025, Snowflake and AWS jointly highlighted a decade‑long collaboration that has now: [14]
- Doubled Snowflake’s transaction growth in AWS Marketplace year‑on‑year, pushing sales through the marketplace above $2 billion.
- Made Snowflake’s AI Data Cloud available in AWS Marketplace for the U.S. Intelligence Community, underlining its security and governance credentials.
- Integrated Snowflake’s Cortex agents with AWS’s new AgentCore in Amazon Bedrock, allowing Snowflake’s data agents to run natively in the AWS AI stack.
Snowflake also launched Snowflake Intelligence, an AI “copilot” that lets executives and analysts query enterprise data in natural language—an offering that already has roughly 1,200 customers a month after launch, according to Reuters. [15]
Management’s Macro View: AI Agents Take the Lead
In Snowflake’s own 2025 and 2026 data‑and‑AI predictions, the company argues that AI agents—not just models—will define the next wave of enterprise AI, moving beyond pilots into production and deeply integrating with line‑of‑business workflows. [16]
For investors, these moves suggest that while near‑term revenue growth may be slowing, Snowflake is aggressively cementing itself at the center of the enterprise AI stack.
What Wall Street Thinks: Price Targets, Bull and Bear Arguments
Analyst and commentator views on Snowflake are deeply split, largely because of valuation.
The Bullish Camp
- Reuters notes that at least 16 brokerages raised their Snowflake price targets after Q3, citing strong AI traction despite the deceleration in guidance. [17]
- An Investing.com summary of broker commentary cites UBS with a $310 target, DA Davidson at $300, Piper Sandler at $285 (Overweight), Rosenblatt at $275 (Buy) and Bernstein at $237 (Market Perform). [18]
- One recent analysis focused on Snowflake’s free‑cash‑flow (FCF) margin guidance, arguing that higher expected FCF could justify a fair value around $276 per share, roughly 20–25% above current levels. [19]
A fresh Seeking Alpha note titled “Snowflake: Wait For A Drop” acknowledges:
- A 37% year‑over‑year surge in remaining performance obligations (RPO), outpacing revenue growth and signaling strong deal momentum.
- Solid profitability on a free‑cash‑flow basis and compelling AI‑driven growth.
But the author still views the stock as “fairly valued” at current levels, preferring to wait for a larger pullback before adding. [20]
The Bearish and Cautious Camp
- Simply Wall St’s DCF model estimates intrinsic value around $163.48 per share, implying about 38% overvaluation versus current prices. It also flags Snowflake’s roughly 17.6x price‑to‑sales multiple as rich relative to its own “fair” multiple estimate near 12.7x. [21]
- 24/7 Wall St. warns that discounting, slowing net revenue retention and AI‑spending uncertainty could mark the early stages of a broader “AI winter” for high‑multiple data and AI infrastructure names. [22]
- A Nasdaq‑hosted Motley Fool video asks whether Snowflake is really a “buying opportunity before 2026,” ultimately emphasizing that while the business quality is high, valuation makes it less compelling than some other growth names today. [23]
Taken together, Wall Street’s formal price targets mostly sit in the mid‑$200s to low‑$300s, but the valuation debate is intense—and that tension tends to amplify volatility whenever Snowflake issues guidance or macro sentiment shifts.
Flows: Insider Selling, Institutional Buying and Options “Whales”
Beyond earnings and guidance, recent flows around Snowflake stock give a mixed picture.
Insider Activity
- On December 5, 2025, longtime director Michael L. Speiser sold 50,346 shares, generating proceeds of about $11.7 million at average prices between roughly $230 and $233. [24]
- The sale was executed under a pre‑arranged 10b5‑1 trading plan, and Speiser still retains a significant indirect stake via various trusts and a limited partnership. [25]
- MarketBeat subsequently reported that Snowflake shares traded down about 1% on December 9 amid coverage of the insider selling, again highlighting that Snowflake trades at very high valuation multiples on traditional metrics. [26]
Insider selling doesn’t automatically signal trouble—especially when it’s pre‑planned—but given Snowflake’s valuation, investors are paying extra attention.
Institutional Interest
By contrast, Daiwa Securities Group has been increasing exposure, raising its position in Snowflake by about 31.8% in the second quarter, according to a recent 13F‑based report. [27]
That suggests some large, long‑term institutions still view Snowflake as an attractive way to play the data and AI boom despite recent volatility.
Options Market Sentiment
A Benzinga scan of unusual options activity on December 10 flagged bullish call sweeps in Snowflake at the $220 strike expiring December 12, with around $45,000 in premium trading hands. [28]
In plain English: some big traders are betting on a short‑term bounce from current levels.
Key Metrics to Watch in 2026
Whether you’re bullish or cautious on Snowflake, the investment case now hinges on execution against a few critical KPIs:
- Product revenue growth
- Q4 guidance calls for about 27% year‑over‑year growth in product revenue, versus 29% in Q3.
- The market will be watching closely to see if growth stabilizes in the high‑20s—or continues to trend lower. [29]
- Net revenue retention (NRR)
- Now around 125%, down modestly from prior periods.
- Further declines would indicate that existing customers are expanding less aggressively or negotiating steeper discounts. [30]
- Remaining performance obligations (RPO)
- RPO growth of roughly 37% year‑over‑year highlights strong demand and revenue visibility, even as near‑term revenue recognition slows due to deal structure. [31]
- Margins and free cash flow
- Management is targeting non‑GAAP product gross margins around 75% and operating margins near 9%, with FCF margins trending higher as the business scales. [32]
- If Snowflake hits or beats these margin targets, some of the valuation premium may look more reasonable.
- AI adoption metrics
- More than 7,300 businesses now engage with Snowflake’s AI features weekly, and around 1,200 customers are already using Snowflake Intelligence. [33]
- A slowdown here would be more worrying than a quarter or two of slower product revenue growth.
Snowflake Stock Forecast: Bull, Base and Bear Narratives
Forecasts are inherently uncertain, but current research and commentary suggest three broad narratives for Snowflake into 2026 and beyond:
Bull Case: Durable AI Growth, Premium Multiple Intact
- AI agents and data‑intensive applications drive sustained product revenue growth in the high‑20s to low‑30s.
- Anthropic, AWS and other hyperscaler partnerships position Snowflake as a default AI data backbone for large enterprises. [34]
- Margins expand faster than expected as scale efficiencies kick in, supporting FCF‑based price targets in the $275–$310 range, roughly in line with the upper band of current Street estimates. [35]
Base Case: Growth Slows but Remains Healthy
- Product revenue settles in the mid‑20s growth range as discounting and macro headwinds partially offset AI tailwinds. [36]
- Net revenue retention drifts slightly lower but remains well above 120%, and Snowflake continues to win large, multi‑cloud AI deals.
- The market “grows into” the valuation—returns roughly track revenue and earnings growth rather than multiple expansion.
Bear Case: AI Winter and Multiple Compression
- Enterprises scale back AI budgets after underwhelming ROI, validating concerns raised by some commentators about an AI spending reset. [37]
- Pricing pressure intensifies, net revenue retention falls further, and growth drops into the teens.
- The market re‑rates Snowflake to a more modest multiple closer to its DCF‑based fair value around $160–$170, as suggested by some valuation models. [38]
Simply Wall St. notes that investor narratives for Snowflake already span a wide range—from bullish targets near $440 to cautious views around $170—reflecting just how uncertain the long‑term trajectory is. [39]
Major Risks for Snowflake Investors
Key downside risks highlighted across recent research and commentary include:
- Valuation Risk: At triple‑digit forward P/E and mid‑teens price‑to‑sales, Snowflake has very little room for execution missteps. [40]
- AI Spending Cycles: If boardrooms conclude that AI projects are not delivering sufficient economic returns, budgets could be cut, particularly for expensive data‑and‑AI platforms. [41]
- Competition: Datadog, MongoDB, Confluent and hyperscalers themselves are all pushing aggressively into adjacent data and AI markets. [42]
- Margin Pressure: Persistent discounting to win long‑duration enterprise deals could limit margin expansion if not offset by scale and product mix. [43]
- Execution and Partnership Risk: Snowflake’s strategy relies heavily on deep alliances with cloud providers and AI model companies; changes in those relationships could impact growth.
Bottom Line: Is Snowflake Stock a Buy After the Pullback?
As of December 10, 2025, Snowflake sits at a crossroads:
- The business fundamentals look strong: high‑20s revenue growth, rising margins, deep AI integrations with partners like Anthropic and AWS, and a growing base of AI‑driven workloads. [44]
- The stock, however, still prices in a lot of future perfection, with valuation models ranging from “modestly overvalued” to “significantly overvalued” depending on growth and margin assumptions. [45]
For growth‑oriented investors who believe in a long‑lasting AI build‑out and trust Snowflake to remain a central data platform, the recent pullback may look like a chance to accumulate shares gradually.
For more valuation‑sensitive investors, the combination of slowing guidance, fierce competition and premium multiples may justify waiting for either a deeper drawdown or clearer evidence that Snowflake can sustain elevated growth and margin trajectories well into 2026 and beyond.
Either way, Snowflake is likely to remain a high‑volatility AI bellwether, where each earnings report and AI partnership update can quickly shift sentiment.
References
1. www.fool.com, 2. www.anthropic.com, 3. www.benzinga.com, 4. simplywall.st, 5. www.investing.com, 6. www.investing.com, 7. www.investing.com, 8. www.reuters.com, 9. www.reuters.com, 10. www.investing.com, 11. www.reuters.com, 12. 247wallst.com, 13. www.anthropic.com, 14. siliconangle.com, 15. www.reuters.com, 16. www.snowflake.com, 17. www.reuters.com, 18. www.investing.com, 19. finance.yahoo.com, 20. seekingalpha.com, 21. simplywall.st, 22. 247wallst.com, 23. www.nasdaq.com, 24. www.investing.com, 25. www.investing.com, 26. www.marketbeat.com, 27. www.marketbeat.com, 28. www.benzinga.com, 29. www.investing.com, 30. www.investing.com, 31. seekingalpha.com, 32. www.investing.com, 33. www.reuters.com, 34. www.anthropic.com, 35. www.investing.com, 36. 247wallst.com, 37. 247wallst.com, 38. simplywall.st, 39. simplywall.st, 40. www.reuters.com, 41. 247wallst.com, 42. www.reuters.com, 43. www.reuters.com, 44. www.anthropic.com, 45. simplywall.st
