Snowflake recently experienced the rollercoaster ride of talking up artificial intelligence prospects to investors. While initially boosting excitement, the tables turned with a disappointing outlook for the coming year.
Initial Excitement
Investors had high hopes for Snowflake, a big data storage platform, due to its stock’s impressive 70% increase in the past year amidst the AI wave. However, reality struck hard as the company shared a mix of positive earnings and bleak future guidance. To add fuel to the fire, Chief Executive Frank Slootman announced his departure, leading to a sharp 23% premarket stock drop to $176.70.
Impact of AI Hype
Analyst Jim Chartier from Monness, Crespi, Hardt noted that Snowflake rode on the tech tape’s generosity during the AI frenzy, ultimately leaving the stock exposed. The criticism suggests that despite short-term gains, long-term sustainability might be at risk.
A Glimmer of Hope
On a brighter note, incoming CEO Sridhar Ramaswamy, an AI expert from Neeva acquisition, might breathe new life into Snowflake’s AI narrative. Analyst Ben Reitzes from Melius recognized Ramaswamy’s potential to pivot Snowflake towards catering to AI developers and embracing a more AI-centric strategy.
With turbulent times ahead, Snowflake’s journey through the ups and downs of AI remains uncertain as it navigates towards a future with a new leader at the helm.
The Impact of AI on Salesforce and C3.ai Stocks
The buzz around artificial intelligence (AI) failed to significantly boost Salesforce shares, with only a 0.5% increase in premarket trading. Despite surpassing expectations and announcing a $10 billion buyback, muted guidance for the upcoming year dampened the stock’s performance.
Salesforce’s AI Outlook
Despite the excitement surrounding Salesforce’s Einstein platform, Guggenheim analysts remain cautious, as management’s guidance for 2025 does not account for a substantial contribution from Generative AI. This led to a Neutral rating on the shares from the analysts. Charlie Miner at Third Bridge echoes similar concerns, highlighting AI as a crucial growth opportunity that could also pose threats from competitors looking to outperform Salesforce through innovation.
C3.ai Soars with AI Success
In contrast, C3.ai experienced a 15% surge in its stock price following better-than-expected earnings, driven by its AI initiatives. This positive outcome underscores the potential of AI in propelling a stock to success, provided it goes beyond mere speculation.
Conclusion
The case of Salesforce and C3.ai demonstrates that while AI can indeed be a game-changer for companies, the real value lies in tangible results rather than just hype.
