Snowflake Faces Stock Decline as CEO Change and Revenue Forecast Disappoint Investors

Snowflake Inc., a major player in the software industry, experienced its most significant stock decline since going public in 2020 after announcing a disappointing sales forecast and the departure of CEO Frank Slootman. The company's product revenue forecast for the first quarter fell short of analyst expectations at $745 million to $750 million, compared to the predicted $769.5 million. Consequently, Snowflake's shares plummeted by 18% to approximately $188 on February 29, 2024, reflecting concerns about the company's growth trajectory amid a slowdown in revenue growth observed in 2023.

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The CEO transition places Sridhar Ramaswamy, Snowflake's Senior Vice President of AI, at the helm, effective immediately. The departure of Slootman, credited with taking Snowflake public and turning it into a major force in the software industry, has raised eyebrows in the tech community. Despite the weaker sales outlook, Snowflake's fiscal fourth-quarter results exceeded expectations, with product revenue increasing by 33% to $738 million, and profit outpacing analyst projections at 35 cents a share. Ramaswamy, known for his expertise in AI, highlighted the pivotal role of AI spending in Snowflake's future strategy during a call with analysts, signaling a strategic shift for the company.

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