What Happened?
Shares of cloud data platform provider Snowflake (NYSE:SNOW) fell 11.3% in the afternoon session after the company's forward-looking guidance for the fourth quarter disappointed investors, even though its third-quarter results beat expectations. While Snowflake reported third-quarter revenue of $1.21 billion and an adjusted profit of $0.35 per share, both surpassing Wall Street's estimates, the positive news was overshadowed by its forecast. The company guided for fourth-quarter product revenue with a midpoint of $1.20 billion. This projection signaled a continued slowdown in growth, representing a deceleration from the 28.7% year-over-year revenue growth rate reported for the third quarter. The softer-than-expected outlook for future growth was the primary reason for the negative market reaction.
The shares closed the day at $235.27, down 11.6% from previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Snowflake? Access our full analysis report here.
What Is The Market Telling Us
Snowflake’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. But moves this big are rare even for Snowflake and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 2 days ago when the stock gained 3.1% on the news that peer, MongoDB reported third-quarter 2025 financial results that surpassed Wall Street's expectations and raised its full-year earnings forecast. For the quarter, MongoDB announced total revenue of $628.3 million, an 18.7% increase from the same period last year, beating estimates of $594.3 million. Adjusted earnings per share came in at $1.32, which was also well ahead of the $0.79 analysts had predicted. The database platform company also added 2,600 new customers during the quarter, bringing its total to 62,500. Looking ahead, MDB showed confidence by issuing fourth-quarter revenue guidance that was 6.5% above analyst expectations and increasing its earnings guidance for the full year by nearly 30% at the midpoint.
Snowflake is up 49.1% since the beginning of the year, but at $234.81 per share, it is still trading 15.3% below its 52-week high of $277.14 from November 2025. Investors who bought $1,000 worth of Snowflake’s shares 5 years ago would now be looking at an investment worth $605.65.
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