Snowflake (NYSE:SNOW) shares slid more than 8% in premarket trading on Thursday after the company issued a fourth-quarter product revenue forecast that failed to meet Wall Street’s elevated hopes.
The data-cloud firm said it expects current-quarter product revenue between $1.195 billion and $1.200 billion, implying around 27% year-over-year growth. Analysts had been looking for roughly $1.19 billion, based on Bloomberg consensus estimates.
Despite the forecast aligning with expectations on paper, several analysts noted that it fell short of the exceptionally bullish outlook investors had priced in after Snowflake’s more than 68% rally this year.
In commentary cited by Reuters, D.A. Davidson analysts said that, given the stock’s sharp appreciation, investors had been looking for “guidance of more than 30%.”
For the quarter ended Oct. 31, the Montana-based company reported adjusted earnings of $0.39 per diluted share on revenue of $1.21 billion, surpassing estimates of $0.35 per share on $1.18 billion in revenue.
Product revenue in the period rose 29% to $1.21 billion, supported by continued traction from Snowflake’s new AI-driven offerings. In an effort to capitalize on strong enterprise demand for AI tools, the firm has expanded partnerships with a number of players — including Anthropic, Amazon Web Services, and Google’s Gemini AI.
BNP Paribas analysts pointed out that although the company delivered “solid” third-quarter results, product revenue growth slowed from the prior quarter and was “likely below the 30%+ levels investors were expecting.”