Why Snowflake’s Stock Is Falling

An investment firm report says the data cloud service provider is seeing increased competition from hyperscalers, including Google’s BigQuery.

Snowflake shares took a hit Friday after a financial analyst firm issued a report that said the data cloud company is seeing increased competition from hyperscalers such as Amazon Web Services and Google.

Snowflake shares, which closed at $279.45 on Thursday, opened at $268.03 Friday morning and sank to a low of $248.92 early in the morning – down 10.9 percent from Thursday’s closing price and down 7.1 percent from its opening.

As of 2 p.m. EDT the shares were trading at $260.90, down about 6.6 percent from Thursday’s close. In its fiscal first quarter the company reported triple-digit revenue growth to $228.9 million.

[Related: Snowflake Expands Partner Program To Include SaaS Developers, Data Providers]

The price of Snowflake shares dropped after investment firm Cleveland Research expressed caution on the stock after hearing reports from Snowflake partners of longer sales cycles due to increased competition from hyperscalers – particularly Google’s BigQuery cloud data warehouse, according to The Motley Fool.

But another report from Piper Sandler said the Snowflake stock selloff was “overdone,” according to StreetInsider.com. That report noted that even if growth slowed in the just completed fiscal 2022 second quarter, such a slowdown is inevitable as Snowflake approaches $1 billion in revenue and the company is still doubling sales year over year.

Snowflake is scheduled to announce its fiscal 2022 second quarter financial results on Aug. 25 after the close of trading.

Snowflake went public last September in a blockbuster IPO that initially put its market cap above such industry giants as Dell Technologies and VMware. The company’s shares have been as high as $387.70 (on Nov. 30, 2020) and as low as $206.04 (on May 3, 2021).