Participate in snowflake (snow) fell on Thursday after the software maker cut its fiscal 2024 guidance for the full year amid slowing growth for cloud computing partners such as Amazon.com (AMZN). Investors shrugged off first-quarter earnings for SNOW shares, which topped Wall Street’s targets.

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Snowflake released its first-quarter financial results after the market closed on Wednesday. SNOW stock fell 13.1% to 153.89 in early stock market trading today.

For the full year 2024 fiscal year, Snowflake lowered its forecast for product revenue growth to 34% to $2.6 billion from its previous forecast of 44% to 45% growth.

“The debate will revolve around whether this is the latest (guideline) cut,” Derek Wood, an analyst at TD Coin, said in a report.

Snowflake sells data analysis and management tools that run on cloud computing platforms such as Amazon Web Services, which is part of Amazon. Since Snowflake’s business model is consumption-based rather than subscription-based, investors have raised concerns about a slowing US economy that is curbing demand.

In addition, Snowflake announced the acquisition of artificial intelligence startup Neeva. Terms were not disclosed.

For the quarter ended April 30, Snowflake’s earnings came in at 15 cents adjusted per share, compared to no earnings in the prior year. Analysts polled by FactSet expected Snowflake to report a profit of 5 percent.

Moreover, revenue rose 48% to $623.6 million, the software manufacturer said. Analysts had expected revenue of $609.7 million.

Snow stocks: forecasts miss the estimates

For the current quarter ending in July, Snowflake expects product revenue between $620 million and $625 million. Meanwhile, analysts expected $647.1 million.

SNOW stock advanced 22% in 2023 heading into Snowflake’s earnings report.

Snowflake gets about 95% of all sales from product revenue. This is the revenue that comes from cloud-based data analytics and storage services. Snowflake also generates revenue from professional services, such as consulting and training.

Cloud computing growth for Amazon, a major partner in Snowflake, has slowed along Microsoft (MSFT) and Google-parent the alphabet (Google). The cloud computing giants are hoping to get a boost from AI workloads in the long run.

According to IBD stock check.

Follow Reinhardt Krause on Twitter @employee For updates on 5G wireless networks, artificial intelligence, cybersecurity, and cloud computing.

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