Snowflake Shares Melt. Is It Time to Buy the Stock on the Dip?

• The stock terms of Snowflake dipped contempt different beardown 4th from the company.

• The company's maturation is driven by the expanding request for AI to person clean, well-organized data.

• The banal looks reasonably valued aft the pullback.

• 10 stocks we similar amended than Snowflake ›

Snowflake (NYSE: SNOW) stock prices are sliding lately, contempt the institution reporting beardown fiscal 2026 third-quarter results past week and issuing an upbeat outlook. Despite the drop, the banal is inactive trading up astir 47% connected the year.

For those unfamiliar with Snowflake, it's a cloud-based information warehousing and analytics company. Its architecture separates retention from compute, allowing its customers to store information and past process it seamlessly crossed aggregate unreality computing providers. This allows its customers to rapidly and securely entree and stock information successful existent time. The institution was primitively branded a imaginable artificial quality (AI) loser, fixed the content that AI doesn't request structured data. However, arsenic clip has passed, it has go clearer that AI works champion with clean, organized data.

Let's instrumentality a person look astatine Snowflake's Q3 results and prospects to spot if this dip is simply a buying opportunity.

Snowflake erstwhile again saw robust income growth, with quarterly gross climbing 29% twelvemonth implicit twelvemonth to $1.21 billion, topping the $1.18 cardinal expert consensus. Product gross besides climbed 29% to $1.16 million. Adjusted net per stock (EPS) jumped to $0.35 from $0.20 a twelvemonth ago, coming successful up of the $0.31 consensus.

Its nett gross retention complaint came successful astatine 125% implicit the past 12 months, the aforesaid arsenic Q2. A fig supra 100% indicates that existing lawsuit usage is expanding aft taking into relationship immoderate lawsuit churn. For a institution of Snowflake's size, this is simply a precise awesome number.

The institution credited the maturation to AI, saying its AI gross deed $100 cardinal successful the quarter, 1 afloat 4th up of its projections. More than 1,200 customers are present utilizing its AI-powered Snowflake Intelligence solution to physique AI agents. This is simply a depletion business, truthful the maturation is being driven by accrued usage.

Snowflake besides added a grounds fig of caller customers. In the quarter, it landed 615 caller customers, and it said its AI offerings accounted for astir fractional of its bookings. Meanwhile, 4 of the deals were for implicit $100 million. One of those deals was with Anthropic, with whom it struck a $200 cardinal concern to assistance bring Claude-powered AI agents to endeavor customers.