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Snowflake melts, and Apple moves on

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Snowflake melts, and Apple moves on

AI cloud company Snowflake, worth $75 billion, took a significant hit this week as it announced slow growth and the retirement of 65-year-old CEO Frank Slootman. This revelation deleted a fifth ($14 billion) of Snowflake’s value.

This shows yet again how vulnerable AI-related companies are to the current mass hysteria surrounding Artificial Intelligence. Anything short of miraculous growth leaves investors disappointed.  It wouldn’t have lost so much value if it were a company in any other sector. Investors seem to be realistic when it comes to different sectors, but with the tech-AI industry, they have become accustomed to super-profits and super-growth, which surely cannot be sustained indefinitely.

Despite this, Snowflake still predicted a 22% growth this year and remains strong despite the ageing CEO’s exit.

This volatility only strengthens the need to maintain a diversified portfolio to spread risk and avoid drastic losses like with Snowflake investors.

The other giants in the AI industry are still riding the rocket of growth and profit as AI has become very much an integrated part of society and every life, as proven by the US Department of Defense, which used computer vision algorithms as part of their AI effort, to detect rocket launches in Yemen and surface vessels in the Red Sea.

After killing its self-driving EV vehicle development, known as Project Titan, Apple has moved the 2000-plus employees focused on the project into its generative AI research and development division. While being tight-lipped about its new AI product offering, apple promises to launch its new AI services and products later this year. It seems Apple is still a good buy despite its disappointing iPhone sales, especially in China.

Please note, the above is for educational purposes only and does not constitute advice. You should always contact your deVere advisor for a personal consultation.

* No liability can be accepted for any actions taken or refrained from being taken, as a result of reading the above.

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