Snowflake tests post-earnings breakout as AI rally faces first challenge
Following a strong quarterly earnings report, SNOW shares surged nearly 40%, while management raised its full-year guidance. However, the recent correction across the AI sector has also weighed on Snowflake.
Snowflake is gradually transforming from a traditional cloud data storage platform into one of the key players in AI infrastructure.
The company reported revenue of $1.39 billion, up 33% year-over-year and 5% above analyst expectations. Product revenue increased by 34%, while full-year guidance was raised to $5.84 billion.
Another positive development was the signing of the largest agreement in the company's history with Amazon Web Services (AWS). Snowflake committed to investing $6 billion in AWS infrastructure over the next five years to support the development of agentic AI and data-processing solutions.
Can Snowflake hold its post-earnings breakout?
Following its impressive post-earnings rally, SNOW has predictably entered a short-term correction.The key level to watch is the gap-up support at $229.49. A significant amount of short-term trading liquidity is concentrated around this area, making a test of $229.49 highly likely.
According to current candlestick patterns, a rebound toward the $255 area could develop over the coming days.
However, if SNOW breaks below $229.49 and establishes itself beneath that level, the probability of a move toward the 200-day simple moving average (SMA) at $204.50 would increase significantly.
Could AI disappoint investors again?
The primary risk for Snowflake remains the same as for most AI-related companies.
After the market's powerful rally, investors are demanding more than just discussions about artificial intelligence—they want to see tangible monetization of AI technologies.
So far, Snowflake appears to be one of the few companies demonstrating a direct connection between AI adoption and revenue growth.
However, if investor enthusiasm toward the sector begins to fade or AI adoption rates fall short of expectations, the stock could face another wave of profit-taking.
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