A deep freeze is coming for Snowflake (SNOW -0.60%) stock, and he suggests investors would be wise to sell out of it. That, at least, is the view of an analyst tracking the next-generation data warehousing specialist.

This prognosticator recently knocked his recommendation on the stock down one peg, and thinks they're in for some financial pain if they stay the course with the company. Could he be right?

Snowflake downgraded to sell

As March came to an end, Redburn-Atlantic analyst Alex Haissl downgraded his Snowflake recommendation to sell, from his previous neutral. As often happens in such cases he accompanied this with a price target cut. In his view, Snowflake is worth $125 per share these days; he previously flagged its fair value at $180. That new level falls 22% below the specialty tech stock's current price.

In his note explaining the modifications, Haissl said he feels that many are being too bullish about the company's potential. "Market expectations beyond the current year remain overly optimistic," he opined.

Additionally, the analyst believes Snowflake is not a good play on the hot technology of the moment, generative artificial intelligence (AI). In downgrading the stock and its specialty tech peer MongoDB, he wrote that both "lack a clear Gen-AI advantage, posing a budget reallocation risk that their current valuations do not reflect."

Uninspiring top-line guidance

Snowflake stock has been in a relative slump since publishing its fourth quarter and full fiscal year 2024 results. Investors were likely most concerned with 2025 guidance, as management forecasted 22% growth in its crucial product revenue. That's quite a comedown from the fiscal 2024 growth rate of 38%. Meanwhile, even after the post-earnings dip the stock remains rather pricey based on its valuations.

But does all that justify a sell-off? Regardless of whether Snowflake develops its own, robust AI capabilities, the need for reliable data storage should grow robustly with the maturing of the technology. I wouldn't necessarily count this company out, so I'd give it more of a fighting chance than Haissl. This stock isn't (yet) a sell for me.