Is the Data Center Investing Trend in Trouble?

September 3, 2026

AI Summary

5 min read

Snowflake just posted its fifth consecutive quarter of better-than-expected profits, revenue growth accelerated from 30% to 37% over three quarters, and management raised guidance aggressively. The stock jumped more than 20% in a single day. But for investors who bought at the IPO, the stock has been a "loser" for years—barely back to its 2021 all-time highs. That tension between a company that routinely beats expectations and a stock that has disappointed is exactly what this episode tries to unpack, before pivoting to a broader question: is the entire data center investing trend hitting a wall?

Snowflake's Acceleration: Why This Time Is Different

The key to understanding Snowflake's recent surge is not just that it beat expectations—it has done that before without much stock price reaction. What changed is the acceleration. Over the past three quarters, top-line growth went from 30% to 34% to 37%, and Q3 guidance implies even more acceleration ahead. Crucially, margins improved alongside that growth: adjusted operating margin rose from 11% to over 15% year-over-year. The hosts note that finding a stock whose revenue growth is about to accelerate—rather than one already doing so—is often the recipe for outsized returns.

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What you'll learn

1 (00:03) **Show Introduction and Snowflake Earnings** - The hosts introduce the episode's dual focus: a new look at the data center trend and a deep dive on Snowflake's surprising earnings beat.
2 (03:15) **Why Snowflake's Rally is Different This Time** - The hosts explain that the 20%+ stock jump is driven by accelerating growth and improving margins, not just a routine beat.
3 (04:43) **The AI Tailwind Behind Snowflake's Acceleration** - The hosts connect Snowflake's resurgence directly to AI workloads driving demand for its data platform.
4 (06:41) **Potential Concerns for Snowflake Investors** - The hosts balance the optimism with risks, including valuation, stock-based compensation, and the sustainability of AI demand.
5 (10:24) **Data Center Trend: New York and Texas Moratoriums** - The hosts pivot to the main topic, revealing that both blue and red states are pausing data center approvals due to power and community concerns.
6 (12:22) **Legitimate Concerns: Power Bills and Community Pushback** - The hosts detail the real-world issues driving opposition, especially rising electricity costs for residents.
7 (13:58) **The Path Forward: State-Level Negotiations** - The hosts argue that the moratoriums are likely temporary and could be resolved through more organized, state-level bargaining.

+ Full timestamped outline available in the app

Show Notes

Description: Snowflake stock is surging towards all-time highs after reporting its latest quarterly earnings, and on today’s show, Jon, Matt, and Lou break down what’s going right for the company in contrast to past years. They also point out some concerns to monitor for Snowflake. The crew then turns the conversation on the data center slowdown before ending the episode with a listener question regarding an asymmetric upside stock that’s down big since buying a position.
Jon Quast, Matt Frankel, and Lou Whiteman discuss:
-Snowflake’s hot quarter
-Some things to watch with Snowflake for now
-Increasing opposition to the data center buildout
-Whether the current slowdown continues and what it means for top data center stocks
-Mailbag: My stock is down. Should I buy more?
Companies discussed: Snowflake (SNOW), Marvell (MRVL), Celestica (CLS), Sterling Infrastructure (STRL)

Host: Jon Quast
Guests: Matt Frankel, Lou Whiteman
Engineer: Bart Shannon

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