Warren Buffett Dumps 6.1 Million Snowflake Shares, Stock Slips

Core Viewpoint - Warren Buffett sold his entire 6.1 million shares in Snowflake, indicating a significant shift in investor sentiment towards the company, especially after a substantial decline in stock value since its peak in October 2021 [1] Management Changes - Frank Slootman, the former CEO, announced his retirement in February 2024, leading to a 20% drop in Snowflake's stock value following a disappointing revenue forecast [3] - New CEO Ramaswamy, a former Google executive, aims to enhance AI capabilities for Snowflake's customers and is focused on long-term growth rather than quarterly earnings expectations [4][5] Competitive Landscape - Wells Fargo downgraded Snowflake's rating and reduced its price target by 35% due to increased competition from Databricks, Amazon Web Services, and Microsoft Azure, which are challenging Snowflake's market share [6] - Databricks reported a 50% sales growth to $1.6 billion in 2023, while Snowflake's sales grew 36% to $2.8 billion, indicating a competitive shift [6] Customer Retention Issues - A data breach involving AT&T's customer data on Snowflake's platform has led to concerns about customer retention, with some high-value accounts considering switching to competitors [8] Earnings Outlook - Snowflake's Q2 earnings report is anticipated to be modest, with a product revenue forecast of approximately $3.3 billion for FY 2025, representing 24% growth, and challenges related to high semiconductor costs [9][10] - Analysts have lowered revenue and earnings estimates for FY 2026 and FY 2027, indicating a cautious outlook for the company's near-term growth [10]