10 Worst Cloud Stocks To Buy According to Short Sellers

7. Snowflake Inc. (NYSE:SNOW)

Short % of float: 4.07%

Number of Hedge Fund Holders: 69

Snowflake Inc. (NYSE:SNOW) posted impressive results for Q2 of fiscal year 2025, with a 30% year-over-year increase in product revenue, reaching $829 million. This strong performance led the company to raise its full-year product revenue guidance.

While Deutsche Bank lowered its price target from $220 to $180 on SNOW, it maintained its Buy rating on the software company. The bank highlighted stable consumption and solid bookings but noted ongoing investor concerns about how new features and AI investments will drive consumption revenue. Despite these concerns, Deutsche Bank remains positive about Snowflake’s long-term potential, emphasizing that the company operates in a large market with ample room for growth and multiple winners. Snowflake’s strengths, including its multi-cloud capabilities, ease of use, extensibility, and network effects, are seen as key drivers of future success.

Approximately 25% of Snowflake’s accounts are now using its AI features weekly, signaling early adoption of these new products. However, uncertainty remains about how these features will translate into consumption revenue.

As of Q2 2024, 69 hedge funds held positions in Snowflake Inc. (NYSE:SNOW), with a total stake of $3.49 billion. Altimeter Capital Management was the largest shareholder, with a $1.29 billion position.