Sachin Sharma
Investor, 22+ Years in Oil/Gas/Energy, SLB & MBB Background
C3.ai is a quasi-scam that sold Camrys while pretending to own a Ferrari, with barely any innovation since. Its deal with Baker Hughes counted on one of the big three oilfield service companies to sell its software, but Baker Hughes had zero DNA in selling software and related services. @Dr_Crossroads adds that C3.ai was clearly junk 3.5 years ago, though founder Tom Siebel tells a good yarn. x.comÂ
C3.ai's flat revenue, heavy cash burn and stock compensation exceeding revenue make it a possible short entry. Shares have doubled from their lows. x.comÂ
C3.ai's revenue is down 50%, and founder Tom Siebel's return is the last thing the company needed. That outweighs a Q4 double beat reported by TrendSpider, with adjusted EPS of -$0.33 versus -$0.37 expected and revenue of $51.6M versus $50.2M. x.comÂ
Combining estimated NTM revenue growth with trailing GAAP EBITDA margin makes Palo Alto Networks, Datadog, JFrog, Rubrik and Snowflake look overvalued against forward EV/sales. Zoom, Alphabet, Oracle, AppLovin, Microsoft, Fair Isaac, Adobe, Amazon and Teradata remain undervalued on this Rule of 40 comparison; Palantir, Cloudflare and CrowdStrike remain overvalued. x.comÂ
Software is nowhere near a floor because AI has broken the assumption behind the sector's premium: very long-duration, highly recurring revenue. Competition is intensifying, new products such as Anthropic's suite far outperform incumbents like Microsoft Copilot, and AI natives move faster without legacy constraints. Accounting flatters results, with Snowflake's SBC above its CY25 free cash flow. Even at 30x GAAP earnings most names have downside, versus Alphabet at 23x and Nvidia at 14x. x.com … Show more
Snowflake's bear case keeps dwindling, but the stock is not a buy at these levels. Stock-based compensation has now fallen as a percentage of revenue for six consecutive quarters. x.comÂ
Snowflake's valuation looks full after more than doubling since May on an AI inflection story, given five years of promised inflections that didn't materialize. Stock-based compensation remains heavy at $1.6B against FY2026 revenue of $4.7B, though dilution has been kept in check lately. At about 23x EV/revenue, or 19x forward, it sits near the top of its 2-3 year range. A Databricks IPO could make investors see Snowflake as old relic tech. x.com x.comÂ
GitLab's results don't justify the stock's after-hours rise. Expense dollars grew far faster than revenue dollars, 117% net retention is unimpressive at this valuation, and stock-based compensation rose 50% year over year. x.comÂ
Snowflake now looks really expensive against a $180-200 valuation, even though the business remains strong. It is growing around 30% and pushing hard into AI with its cloud data solutions, which could drive strong growth for years. x.comÂ
Snowflake has not solved its stock-compensation problem just because the stock jumped, and its valuation still is not justified by any visible path to real profits. SBC still eats 29% of revenue, GAAP EBIT margin is -24%, and future GAAP earnings remain wildly uncertain. @Sam_Badawi argues the 38% jump on reaccelerating growth shows Snowflake growing out of its SBC problem, but the market simply does not care about the bottom line right now. It remains speculative and could work. x.comÂ
Snowflake is still not GAAP profitable at a $125 billion valuation because it keeps chasing top-line growth at any cost. x.comÂ