Snowflake is in talks to acquire privately-held RedPanda amid its push into artificial intelligence products, according to a report. Snowflake stock dipped on Thursday amid the news.
RedPanda operates a streaming data platform that competes with Confluent. According to the Information, Snowflake could purchase RedPanda for around $1.5 billion.
"With respect to RedPanda's technology, we have generally heard good things. It is viewed as a low-cost alternative to Confluent Cloud," said William Blair analyst Jason Ader in a report.
"Should the deal be consummated, Confluent will have some strategic decisions to ponder. The company could respond by getting into Snowflake's core market by acquiring a data lake vendor like Starburst. Alternatively, the company could explore selling itself (to a CSP or Snowflake competitor Databricks), especially if the takeout multiple drives material shareholder value."
On the stock market today, Snowflake stock dipped 2% to close at 179.29. Confluent stock retreated 2% to 29.50. SNOW stock has gained 18% in 2025. Confluent stock has advanced 7%.
Is Deal A Positive For Snowflake Stock?
"We think this acquisition would be more of an accelerator for Snowflake's generative AI road map and not a means to enter into the traditional data streaming space and compete directly/look to displace Confluent at an enterprise level," said RBC Capital analyst Matthew Hedberg in a report.
Hedberg added: "We'd view the potential RedPanda acquisition as a good fit for Snowflake, which already has data streaming technology, but this deal could increase its technology capabilities and road map further, allowing it to better enable the real-time data streaming."
"A potential acquisition of RedPanda could also better position Snowflake to compete with Databricks, who also has data streaming capabilities."
Snowflake sells data analytics and management software that runs on the cloud-computing platforms of Amazon.com, Microsoftand Alphabet's Google.
Snowflake's new CEO, Sridhar Ramaswamy, founded AI startup Neeva, which Snowflake acquired in 2023.
Currently, Snowflake stock holds an IBD Composite Rating of 73 out of 99, according to IBD Stock Checkup. IBD's Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths. The best growth stocks have a Composite Rating of 90 or better.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
