Snowflake (SNOW) stock news: Q4 Earnings Soars with Strong Earnings Beat, but Near-Term Headwinds Loom

Snowflake (SNOW) stock news: Q4 Earnings Soars with Strong Earnings Beat, but Near-Term Headwinds Loom

Snowflake (SNOW) reported strong fourth-quarter earnings that surpassed Wall Street expectations, driving its stock up 10.9% in after-hours trading. Key highlights include:

• Earnings: 30 cents per share vs. 18 cents expected.
• Revenue: 986.8M vs 957 million expected.
• Product Revenue: 943.3M vs 914 million expected, driven by customer consumption of compute, storage, and data transfer services.

For Q1 2026, Snowflake forecasts product revenue between 955M and 960 million, slightly below the 961M analys consensus.

For the full year, it expects 4.28B in product revenue, beating estimates of $4.23B.

Snowflake continues to benefit from enterprise investments in AI software, with its Snowflake Cortex AI platform gaining traction. The company also announced an expanded partnership with Microsoft to integrate OpenAI models directly into its platform, reinforcing its position as a key player in data and AI.

CEO Sridhar Ramaswamy emphasized Snowflake's growing customer base, with over 11,000 businesses relying on its platform.

Despite the strong results, analysts note potential near-term headwinds, as the company's guidance suggests a slowdown in growth (21-22% for Q1). Snowflake remains a leader in the data warehousing market but faces uncertainty around the impact of AI-driven growth and ongoing competition.

The stock has risen 7.6% year-to-date but is down 28% over the past 12 months, weighed down by a high valuation (trading at 161x forward earnings), a CEO transition, and competitive pressures.

Price Action & Chart Pattern

• Current Price: $173.69 (-2.4% on the week).

Consolidation Pattern

The stock is forming a bullish flag (highlighted in green) after a recent uptrend, suggesting a continuation move may be possible if it breaks out above the flag.

Support and Resistance:

• Major Resistance: Around $238, a previous strong level of resistance.
• Support Level: Near $120-$140, which aligns with the breakout level of the prior rally.
• Long-term Resistance: At $390+, marking the all-time high.

ChartMill Trend Indicator

• Price is currently above the ChartMill Trend Indicator and the indicator itself is green and rising, which supports the idea that the long-term trend is shifting bullish.

Volume Analysis

• The breakout attempt from the recent bottoming structure was accompanied by strong volume, confirming institutional participation.
• Recent consolidation phase shows declining volume, which is typical for a bull flag. A breakout on higher volume would be ideal.

RSI & Momentum Analysis

• RSI (58.64): The stock is in bullish territory but is showing slight bearish divergence (price making higher highs, but RSI making lower highs – highlighted in blue).
• Implication: This suggests momentum is slowing, and a failed breakout could lead to a deeper pullback.

Trend Outlook

Bullish Factors:

• Price is above the ChartMill Trend Indicator
• Bull flag consolidation within an uptrend.
• Strong volume in prior breakout.

Bearish/Risk Factors:

• Bearish RSI Divergence (potential loss of momentum).
• Resistance at $238 could pose a challenge.

Trading Plan Consideration

Bullish Case:

• A breakout above $195+ on high volume would confirm the next leg higher toward $238 resistance.

Bearish Case:

• A break below $160-165 (below the ChartMill Trend Indicator) would invalidate the bull flag and could lead to a retest of $120.

Final Verdict

SNOW is in a strong recovery phase, forming a bullish continuation pattern. However, bearish RSI divergence suggests momentum is slowing, and traders should watch for confirmation via volume and price action before committing to a position.