Snowflake (SNOW) shares continue to face downward pressure, plummeting 5.04% in pre-market trading on Thursday. This decline follows a significant 5.59% drop during Wednesday's regular trading session, triggered by Macquarie's initiation of coverage with a Neutral rating and a $160 price target.

Macquarie analyst Steve Koenig's balanced stance on the cloud data platform provider appears to have sparked a sell-off among investors. While acknowledging Snowflake's strong position in the cloud data warehousing segment and its expansion into artificial intelligence and data engineering, Koenig highlighted several potential headwinds that could impact the company's growth trajectory:

1. Aggressive fiscal 2026 product revenue guidance, offering limited room for upside compared to previous years. 2. Growing competition, particularly from Databricks. 3. Questionable positioning against larger hyperscalers in leveraging generative AI opportunities. 4. Potential pressure on the company's consumption-based revenue model if economic conditions tighten.

Despite praising Snowflake's disciplined approach, product differentiation, and sales execution, Macquarie ultimately found the positives and risks to be evenly matched, justifying its Neutral stance. This cautious outlook seems to have prompted investors to reassess their positions, resulting in the sharp decline in Snowflake's stock price that has continued into the pre-market session.