Snowflake's stock experienced a sharp decline of 5.03% during intraday trading on Wednesday, extending recent losses for the data analytics software company.

The drop comes amid broader concerns about artificial intelligence disruption in the software sector. Market analysts have noted that recent releases of AI automation tools from companies like Anthropic have triggered selloffs across software stocks, with fears that AI services could potentially replace existing software packages and pressure revenues. Snowflake, despite being viewed by analysts as "one of the most obvious AI beneficiaries" and having recently signed significant partnerships with OpenAI and Anthropic, has not been immune to these sector-wide concerns.

Adding to the negative sentiment, RBC Capital Markets cut its price target on Snowflake from $300 to $245 while maintaining an Outperform rating. This adjustment follows Snowflake's recent volatility, where the stock dropped 27% over six trading sessions in late January and early February, though it has since recovered some of those losses.