Where I'd Buy Snowflake After Unauthorized Remarks and Reaffirmed Guidance

When I first became interested in Palantir Technologies  (PLTR) , I immediately became convinced that CEO Alex Karp was the chosen one that could lead that firm to glory. A couple of years later, those of us who believe have been handsomely rewarded for that faith. That was before Palantir's AI platforms really took off and really before AI was anything more than "The next big thing." At that time, the terms "big data" and "machine learning" were used far more than was the term "generative artificial intelligence."

Palantir was a "big data" firm. So was Snowflake  (SNOW) . 

Wall Street's analytical community chose to back Snowflake back then. Those of us who graduated from that school and moved on, backed Palantir. That said, I always felt that Snowflake could be a legit competitor and have traded the stock off and on as the shares collapsed from late 2021 through late 2024 and now have rallied sharply off of those late 2024 lows.

Now, the two firms don't really see each other as direct competition. Snowflake still describes itself as a data cloud and AI company. Snowflake still warehouses data for clients and still uses AI to fine tune that information as a single source that can be used to solve business problems, which is along the lines of what Palantir does on the commercial side, but the two firms announced a partnership earlier this month.

As part of that deal, Snowflake's AI data cloud would be integrated with Palantir's Foundry and AIP (artificial intelligence platform). Clients would be able to build more efficient and trustable data pipelines and accelerate data-based analytics. Joint customers would achieve what is being termed "bidirectional, zero-copy interoperability." 

Since the start of October, five different sell-side analysts rated at five stars by TipRanks have increased their price targets for SNOW.

Monday Morning

On Monday morning, Snowflake reaffirmed its revenue guidance for the third quarter and for the full year after a company executive made certain statements in a Sunday interview that this executive was apparently not authorized to make. The original sales guidance of $1.125 billion to $1.13 billion in revenue for the quarter and $4.395 billion for the full year was issued in late August. 

The firm, after the interview, which appeared at an Instagram account, felt compelled to file a Form 8-K with the SEC. Regardless, Wall Street is taking the news well. Snowflake earnings are not expected for another month.

The Charts​

Readers will see on this weekly chart, above, that SNOW is trying to break through the 50% retracement level, also known as the "half-way back" point ​of the stock's late 2021 to late 2024 selloff. 

Fifty percent retracements are not true Fibonacci sequence levels but are very real levels of retracement in financial markets that can show up as either support or resistance. 

Let's zoom in:

​​Moving back to the daily chart, readers will see SNOW comfortably inside of the upper chamber of our Raff Regression model as it has been for the most part, for a year. The stock has found regular support at its 21-day exponential (EMA), implying good support from the swing crowd. The stock has not even tested its 50-day or 200-day simple moving averages (SMAs) since late August, which was when it reported Q2 earnings.

The indicators are strong. Relative strength reads as quite robust but not overbought. The daily moving average convergence divergence (MACD) has the histogram of the 9-day EMA as well as the 12-day EMA and 26-day EMA in all of the right places. The half-way back point ($255) is the pivot. 

In my opinion, though I am not currently in the name, if SNOW holds pivot, I would be interested in initiating the name with a price target north of $300.

At the time of publication, Guilfoyle was long PLTR equity.