TLDRs;
- Snowflake shares fell 8.6% ahead of earnings amid investor AI concerns.
- Cortex Code CLI expansion and new subscription sparked market jitters.
- Analysts trim targets while broader tech stocks face downward pressure.
- Investors focus on usage-based revenue and future guidance this week.
Snowflake Inc. (NYSE:SNOW) saw its shares fall 8.6% on Monday, closing near $158 in after-hours trading, as investors braced for the company’s upcoming quarterly earnings report scheduled for Wednesday, February 25.
The decline reflects growing investor caution over the shift in corporate spending toward AI initiatives, which could alter usage patterns of Snowflake’s cloud data services. During Monday’s session, SNOW traded in a range between $155.40 and $175.55, illustrating heightened volatility in software stocks.
Cortex Code Update Raises Investor Concerns
The market reacted strongly to Snowflake’s announcement regarding its Cortex Code CLI, which now supports additional workflows including dbt and Apache Airflow. Alongside this, the company introduced a self-service monthly subscription that operates independently of Snowflake’s main consumption model.
While the updates aim to expand developer flexibility, some investors view these moves as a potential disruption to the company’s core revenue stream, which is heavily usage-dependent.
“Developers don’t operate in a single system, and AI coding assistants shouldn’t either,” said Christian Kleinerman, Snowflake’s EVP of Product.
Analysts Adjust Targets and Market Pressures
Analyst sentiment has been mixed. BTIG’s Gray Powell maintained his buy rating on Snowflake but reduced the price target from $312 to $235, citing uncertainty surrounding growth expectations and the evolving AI landscape.
While Snowflake’s revenue growth is estimated to remain near 25%, some investors were anticipating figures closer to 30%. The broader technology sector also faced downward pressure on Monday, as market participants weighed rising AI-related costs and trade policy concerns, adding to the pre-earnings volatility.
Outlook Focused on Usage and Guidance
Investors are now closely monitoring Snowflake’s guidance for the upcoming quarter. Consensus estimates from Zacks suggest earnings of 27 cents per share and revenue around $1.25 billion, but it is the outlook for product revenue and customer usage trends that could shape market reactions.
Snowflake competes directly with Databricks and the cloud divisions of Amazon, Microsoft, and Google, meaning any softness in usage or delayed projects could trigger prolonged pressure on the stock. Analysts warn that cautious guidance combined with soft customer activity could keep valuations under stress, especially in a market already sensitive to AI-related developments.
Snowflake’s earnings conference call is scheduled for 3 p.m. Mountain Time (5 p.m. ET) on Wednesday, when the company will provide more detailed insight into revenue trends, product adoption, and the impact of AI initiatives on its growth strategy. Investors are bracing for potential swings, with attention firmly fixed on how usage-based metrics and subscription expansions will influence the company’s future trajectory.
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