Snowflake Shares Fall on Slower Q4 Revenue Forecast – Dec 2025

Snowflake Shares Fall Amid Slower Product Revenue Growth Forecast for Q4

Snowflake Inc. reported its third-quarter (Q3) earnings on 3 December 2025, posting revenue of $1.21 billion and EPS of $0.35, modestly above analyst expectations. Despite the strong results, the company lowered its Q4 product revenue growth forecast to 27%, translating to $1.19–$1.20 billion, below both prior guidance and market expectations of over 30%. This cautious outlook triggered a nearly 8% decline in after-hours trading, shaking investor confidence.

The slowdown is partly due to discounts on large or long-term deals, which are strategic for future growth but delay immediate revenue recognition. This has raised concerns about short-term earnings performance, despite Snowflake’s strong fundamentals.

The news comes after a year of impressive gains, with Snowflake shares up ~70% year-to-date. If the decline continues, the company could see a market capitalization reduction of around $7 billion.

On the positive side, Snowflake is actively expanding its AI capabilities. The company announced a $200 million multi-year partnership with Anthropic to integrate the Claude AI models into its platform. Its AWS Marketplace performance remains robust, with annual transaction volumes exceeding $2 billion, reinforcing its strong market position.

Analysts note that Snowflake’s long-term prospects, particularly in AI-powered data cloud services, remain solid. However, short-term market expectations and investor sentiment have pressured the stock, illustrating how growth guidance can quickly influence market behavior.

This development underscores the gap between growth expectations and actual performance. While Snowflake’s core performance is strong, future guidance plays a decisive role in stock reactions.

Going forward, Snowflake will need to effectively implement its AI and cloud strategies to regain investor confidence, stabilize its market position, and drive share prices higher. The event serves as a reminder that modern data and AI cloud companies are highly sensitive to forward-looking growth projections, even when current results are solid.