Today, investors in cloud-computing play Snowflake (NASDAQ:SNOW) are seeing some big declines. Indeed, SNOW stock is down 9% at the time of writing on heavy volume today.
The latest move appears to mark the reversal of some rather strong momentum with Snowflake. Indeed, over the past three months, shares of this hypergrowth stock have gone up in a slow-and-steady fashion. However, today’s sharp reversal brings the company’s stock price below the 50-day simple moving average (SMA), signaling this stock could be in for more downside from here.
Technicals aside, Snowflake has benefited from some rather strong fundamentals. This is a company that saw triple-digit revenue growth this past quarter. However, widening losses have kept some investors on the sidelines.
That said, let’s take a look at what’s driving today’s price action in Snowflake.
Why Is SNOW Stock Down Today?
- At first glance, today’s move in SNOW stock appears to be on little news.
- However, a number of reports have signaled that a research note from Cleveland Research is behind today’s move.
- Reportedly, Cleveland Research has warned investors of competitive pressures on Snowflake’s revenue streams from companies such as Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL).
- Accordingly, investors are seemingly discounting Snowflake’s goal of achieving $10 billion in revenue by 2029 today.
- As a hypergrowth stock driven mainly by top-line performance, today’s news is driving underperformance to a degree many investors may not think is warranted.
#SillyStock Move of the Day! Snowflake melting in August. But why? $SNOW down 8% and only “news” I’m seeing is chatter of cautious comments on a blog/analyst reports. Company reports results next week.
— Paul R. La Monica (@LaMonicaBuzz) August 20, 2021
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.