Down 23% This Year, Is It Finally Time to Buy Snowflake Stock?

Shares of information warehouse specializer Snowflake (NYSE: SNOW) person had a disappointing commencement to 2026. As of this writing, the maturation banal is down astir 23% twelvemonth to date.

This steep decline, however, comes arsenic the underlying concern is showing awesome momentum -- astatine slightest connected its apical line. Additionally, the company's gross maturation complaint is accelerating, benefiting from an artificial quality (AI) tailwind.

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For investors who person been watching from the sidelines, a pullback similar this successful a fast-growing concern tin look similar a tempting opportunity. Is the stock's caller weakness an opportunity?

Snowflake, which records gross based connected level usage, saw its fiscal fourth-quarter merchandise gross emergence 30% twelvemonth implicit twelvemonth to $1.23 cardinal -- an acceleration from 29% maturation successful the anterior quarter.

One operator for the caller acceleration is AI. Customers are progressively relying connected Snowflake's information unreality to signifier and process the monolithic amounts of information required to bid and tally AI models. In fact, absorption noted during the company's net telephone that much than 9,100 accounts are already utilizing the company's AI offerings.

"A twelvemonth ago, we were talking astir the committedness of AI," explained Snowflake CEO Sridhar Ramaswamy during the company's fiscal fourth-quarter net call. "Today, the committedness is real, and Snowflake sits astatine the halfway of the endeavor AI revolution."

This surging request is intelligibly evident successful the company's backlog. Snowflake's remaining show obligations (RPO), oregon the contracted gross that has not yet been recognized, totaled $9.77 cardinal successful fiscal Q4. This represents 42% year-over-year maturation -- marking the 2nd consecutive 4th of accelerating RPO growth. And the company's nett gross retention complaint remained astatine a precise steadfast 125%, indicating that existing customers are steadily expanding their spending connected the platform.

With accelerating gross and a booming backlog, the bull lawsuit for Snowflake is casual to understand. But, unfortunately, the carnivore lawsuit is conscionable arsenic casual to understand.

The archetypal contented for investors to see is profitability. Despite its awesome top-line momentum, Snowflake remains unprofitable connected a mostly accepted accounting principles (GAAP) basis. The institution reported a GAAP operating nonaccomplishment of $318.2 cardinal successful fiscal Q4. While its non-GAAP (adjusted) operating borderline reached a overmuch healthier 11%, the dense stock-based compensation, which weighs connected its unadjusted bottommost line, remains a precocious outgo for shareholders.