For a long time Snowflake (NYSE:SNOW), branded itself as a data cloud specialist. That’s still true, but a new leader is pushing Snowflake in a different direction. It’s a good change, and enterprising investors ought to look at Snowflake stock while it’s still ultracheap.
Granted, Snowflake hasn’t received positive press lately. Frankly, recent reports have been embarrassing to Snowflake, but they shouldn’t be deal breakers for investors. So, let’s see what people are so worried about and then consider if there’s a contrarian opportunity for stock traders.
Snowflake and the Big Data Breach
Previously, I suggested investors should wait for Snowflake stock to pull back. Lo and behold, Snowflake shares now trade at a substantial discount. Interestingly, Snowflake’s ex-CEO, Michael Speiser, is buying shares while others are selling them.
Again, I’m not claiming that Snowflake is 100% problem-free now. Reports are circulating that hackers have potentially breached the accounts of up to 165 Snowflake customers.
That’s not good for Snowflake’s reputation as a cloud-based data-warehousing firm, of course. Apparently, some or possibly even all of the targeted businesses had been using single-factor authentication.
I’m not trying to blame the victims here, but businesses should always use multifactor authentication.
I expect that this event, like hacking events in general, will be a “this, too, shall pass” type of situation. Hopefully, investors will forgive Snowflake and some valuable cybersecurity lessons will be learned.
Snowflake’s CEO Goes All in on AI
Sridhar Ramaswamy has been Snowflake’s chief executive for around six months. However, he’s already pushing the company in a bold new direction.
More specifically, Ramaswamy wants Snowflake to be known as an artificial intelligence specialist. Notably, Snowflake now bills itself as an “AI Data Cloud company, rather than just as a “Data Cloud” company.
So, don’t be surprised if you catch Ramaswamy talking about AI at every opportunity. For instance, he told Fortune that AI now pervades “everything that is happening in Snowflake,” and that AI has become the “nervous system” that connects companies internally.
Ramaswamy also declared that this is “the year of AI” — but I think you get the idea.
It’s a smart move during a time when investors demand AI acceleration in every technology company. Soon enough, the company’s AI-tech integration should bring some reluctant Snowflake stock traders into the fold.
Snowflake Stock Is Cheap Enough to Buy Now
I recommended waiting for a big dip, and now Snowflake shares are quite cheap. Did the data-breach news scare some investors away? Yes, probably, but that’s likely a temporary, fixable problem.
Snowflake’s new CEO is enthusiastic about AI integration, which should boost investor confidence. If you’re contrarian, consider buying Snowflake shares today.
On the date of publication, David Moadel 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.
