Breakfast News: SNOW's Growth Outlook Cools
December 4, 2025
| Wednesday's Markets |
|---|
| S&P 500 6,850 (+0.30%) |
| Nasdaq 23,454 (+0.17%) |
| Dow 47,883 (+0.86%) |
| Bitcoin $93,478 (+2.17%) |
1. SNOW Falls 8% on Earnings Guidance
Snowflake (SNOW +2.05%) fell almost 9% in pre-market trading after quarterly results indicated slower revenue growth going forward along with pressure on operating profit margins.
- "Our enterprise AI agent saw the fastest adoption ramp in Snowflake history and is transforming how businesses interact with their data": CEO Sridhar Ramaswamy talked up the benefits of AI products, but the financial outlook raises some concerns about the profitability of these tools.
- Beating the S&P 500 by 5% since August 2023 Stock Advisor recommendation: A $200 million partnership with Anthropic was announced that will make the Claude AI models available on Snowflake's platform, along with an expanded partnership with Accenture (ACN +4.65%) to help businesses adopt AI and data-driven solutions.
2. Meta Faces EU Probe on WhatsApp AI
The FT reports the European Commission is set to open a probe into Meta (META 1.16%) regarding the rollout of AI features within WhatsApp, with concerns around abuse of its dominant position.
- New features "may limit production, market access or technical developments in the AI Chatbot services market": The antitrust enforcer would be following on from Italian authorities who are already investigating the company, asserting the WhatsApp integration was done without user consent.
- Recent U.S. ruling could help Meta: Last month, Meta won a case against the Federal Trade Commission that pushed for an unwind of the purchase of WhatsApp, as the judge ruled the company doesn't hold monopoly power.
3. PSTG Plummets: Wall Street Hates Uncertainty
Pure Storage (PSTG 27.21%) closed over 27% lower despite results beating expectations, as management were vague in the proposed strategy pivot to try and capture larger clients.
- "Investors were looking toward 'what's next' for the company rather than what actually happened": Fool analyst Emily Flippen, CFA, stayed calm and noted "right now, there are no visible cracks that Pure Storage's flash memory model is breaking or that the business is having a hard time attracting customers."
- "A powerful pipeline of future revenue": Elsewhere yesterday, Rule Breakers rec Salesforce (CRM +1.64%) nudged up 2% in early hours trading thanks to results detailing a 114% jump in AI solutions revenue versus last year, with CEO Marc Benioff citing strong remaining performance obligations.
4. Notable Thursday Retail & SaaS Earnings
Ulta Beauty (ULTA 0.64%) will release earnings following the market close, with investors hoping the sales jump from last quarter will continue as it focuses on hot trends including Korean beauty.
- Beating revenue estimates every quarter for the past two years: DocuSign (DOCU +2.56%) should also report after trading finishes for the day, with accelerated product innovation (especially AI features) being watched for in the same way as Q2.
- A Dividend Investor rec with a current yield of 2.11%: Kroger (KR 1.24%) will provide a Q3 update ahead of the market open. After raising full-year guidance last time, investors will be focusing on whether the company has momentum heading into 2026.
5. Your Take
Which of the following Hidden Gems picks, all down 30% or more since being recommended in the last 18 months, do you think has the best chance of recovering and beating the market over the next 5 years, and why: Equifax (EFX +0.56%), GE HealthCare (GEHC +4.20%), or Deckers (DECK +3.49%)? Discuss with friends and family, or become a member to hear what your fellow Fools are saying.
