2 Reasons I'd Avoid Snowflake Stock Despite Its Continued Growth
Snowflake (NYSE: SNOW) is a cloud computing company poised to benefit from growing investments in artificial intelligence (AI). As CEO Frank Slootman said, "There's no AI strategy without a data strategy."
And while that could be the case, Snowflake's business isn't exactly taking off due to AI. In fact, its losses increased this past quarter, and its growth slowed. Despite the supposed catalyst for its business in AI, the company isn't an overwhelming buy. Here are two key reasons I would avoid the stock today.
What's hard to get past is the fact the stock trades at an incredibly high valuation: 23 times sales or 12 times book value. While the business is growing, it's not at a fast enough rate, nor is it trending in the right direction, to justify this type of a price tag.
Source Fool.com
