❄️🤖📉 Snowflake AI Backlog Booms While Price Crashes Into Support ❄️🤖📉
@Barcode：
$Snowflake(SNOW)$ $Palantir Technologies Inc.(PLTR)$ $Alphabet(GOOGL)$ 🎯 Executive Summary I’m convinced this Snowflake print is exactly what sophisticated money wants from a high multiple AI infrastructure name: bookings and backlog exploding, margins expanding, price punished into a key support pocket. Q3 FY26 product revenue rose 29% YoY to $1.16B, total revenue reached $1.21B, and RPO accelerated to 37% YoY at $7.88B. AI is no longer a side narrative. Management called Snowflake Intelligence the fastest ramping product in company history with over 7,300 weekly AI users, up sharply from prior quarters, and AI now touches roughly 28% of deployments and about 50% of bookings. The stock reacted with an 11% one day drop from the mid 260s toward 235, filling the earnings gap and tagging the 100DMA around the 239 to 240 gold band zone. Even after this flush SNOW is still about 54% higher YTD, but price is now down roughly 22% over five years while revenue is up more than 650%, highlighting how violently valuation can compress. I see a structurally improving AI platform whose share price is resetting at a pivotal technical level. 🐂 Bull Case 1. Product revenue increased 29% YoY to $1.16B, total revenue hit $1.21B, and Q3 once again beat Street expectations at the top line and bottom line. 2. RPO jumped 37% YoY to $7.88B, up from 33% in Q2, with current RPO at about $2.95B, up roughly 35%, signalling robust near term and multi year visibility. Around 60% of RPO sits in the one year bucket and 40% in longer contracts, providing both durability and leverage as consumption catches up. 3. Net revenue retention remained a strong 125%, suggesting the consumption slowdown has found a floor while large customers keep expanding workloads. Churn stays under 5%, a critical confirmation that the platform is sticky. 4. Non GAAP product gross margin of 75.9% and operating margin of about 11% represent roughly 450 bps of YoY expansion. Non GAAP operating income of $131M grew more than 120% YoY, proving operating leverage even as AI investments ramp. 5. Adjusted EPS printed $0.35 versus expectations around negative $0.03, a massive inflection into profitability. Operating cash flow reached about $138M, up roughly 35% YoY, and adjusted FCF margin was 11% for the quarter, with a 25% target for the full year. 6. AI stack reached a $100M run rate one quarter ahead of schedule, combining Cortex AI, SQL AI, REST APIs, Cortex Search and Analyst, plus Snowflake Intelligence. Intelligence already has 1,200 active customers and 7,300 weekly AI users, with management stating AI influenced about half of bookings and 28% of deployments. 7. Customer metrics confirm scale. Total customers crossed 12,600, up about 18% YoY, with 1,200 new logos in Q3 alone. Customers spending over $1M reached 688, up 29% YoY, and Global 2000 customers grew to 776 with average TTM spend of $2.3M. 8. A landmark $200M multi year commitment with Anthropic secures Claude capacity on a buy side basis to power agentic AI workflows, positioning Snowflake as a neutral data and governance layer for frontier models. There is no revenue recognised yet, but capacity is locked for scaling pilots into FY27 and beyond. 9. Ecosystem flywheel is real. AWS Marketplace sales surpassed $2B, Google Gemini integration deepened, and Accenture now fields more than 5,000 Snowflake specialists. Partnerships with SAP, Salesforce, Workday, UiPath, Palantir, Splunk and ServiceNow strengthen Snowflake’s claim to be the enterprise AI data spine. 10. Regionally, Americas generated about 65% of product revenue and grew 31% YoY, EMEA contributed 22% with 26% growth, and APAC delivered 13% with 24% growth despite slower AI readiness in Japan and China. That dispersion leaves upside as APAC catches up. 🐻 Bear Case 1. Growth is slowing from a high base. Product revenue growth of 29% YoY is down from 32% in Q2, and Q4 guidance for $1.195B to $1.2B implies about 27% growth and roughly 3.5% sequential expansion. The deceleration is real even if RPO argues for future re acceleration. 2. GAAP profitability remains distant. GAAP operating loss is around negative $329M and GAAP net loss about negative $292M, translating to roughly negative 24% net margin. 3. Stock based compensation is heavy at about $442M. Roughly 32M shares were issued for SBC, creating a 5% to 7% annual dilution overhang that only partially gets offset by the $233M buyback. 4. Non GAAP operating margin is guided to 7% in Q4, down from 11% in Q3, as AI and go to market investments spike into year end. That margin compression, if prolonged, can challenge the premium multiple. 5. APAC growth trails Americas and EMEA due to regulatory friction and AI adoption lag. With APAC at 13% of revenue, any escalation in US China tech tensions could drag regional consumption. 6. Valuation is still demanding. At around an 88B market cap, SNOW trades in the high teens to low 20s times forward revenue and a triple digit forward P E. Peers like Datadog and MongoDB are growing at similar or faster rates with meaningfully lower multiples, which raises the bar for Snowflake’s execution. 7. AI demand is uneven. Management estimates roughly 40% of Global 2000 customers are still in pilot phases for AI agents. That means the present 50% bookings influence from AI may not compound in a straight line and could be lumpy across quarters. 💰 Financial Performance Breakdown I’m extremely confident that the detailed numbers support a thesis of a business strengthening beneath a volatile share price. Revenue and segments • Total revenue: $1.2129B, up 28.7% to 29% YoY. • Product revenue: $1.16B, up 29% YoY and still about 96% of total revenue. • Professional services and other revenue grew about 30.5% YoY, but remains a small percentage. Margins and profits • Cost of revenue: $332.6M, yielding gross profit of $880.3M. Non GAAP gross margin sits at about 72.6% overall and 75.9% for product. • Operating expenses: Sales and marketing $429.6M (35% of revenue), R&D $254.5M (21%), G&A $64.9M (5%). • Non GAAP operating income: $131.3M, for an operating margin of around 10.8% to 11%, more than doubling YoY. • GAAP net loss: about $291.6M, primarily due to $442.4M of SBC. • Adjusted EPS: $0.35, beating a prior negative consensus of roughly negative $0.03. Cash flow and balance sheet • Operating cash flow: about $138M, up roughly 35% YoY. • Adjusted FCF margin: 11% this quarter, with management reiterating 25% for the full year. • Cash and equivalents: about $1.94B, down 9.7% YoY due to buybacks, but broader liquidity including investments totals around $4.4B. • Deferred revenue: $391M, up 21.8% YoY, suggesting some billing front loading that can smooth Q4 cash and consumption. • The company remains net debt free. Key KPIs • RPO: $7.88B, up 37% YoY, with current RPO at about $2.95B, up 35% YoY. Management noted that large deals can initially drag recognised revenue because volume discounts kick in before usage ramps, and they estimate 20% to 30% of large deal value can fall into this pattern. • Customers: 12,600+, up 18% YoY, with 1,200 new logos in Q3 and churn below 5%. • Customers over $1M: 688, up 29% YoY. • Global 2000 customers: 766 to 776 range, steadily rising. Other notes • A hyperscaler outage during the quarter clipped revenue by about $1M to $2M, a minor headwind and proof of some dependency risk, but not thesis breaking. • Management highlighted more than 370 GA releases year to date, including enhancements in OpenFlow ingestion, Unistore HTAP, Snowflake Postgres and Select Star cataloguing. Crunchy Data integration for Postgres is expected to reach GA within a couple of months, targeting OLTP and AI powered application workloads. 🛠️ Strategic Headwinds and Execution Risk I believe the razor edge here is execution in a complex consumption model, not demand. Those four nine figure deals are fantastic for backlog, but volume discounts mean a portion of that 37% RPO surge lives in multi year buckets that depress near term recognised revenue. Management acknowledged that 20% to 30% of large deals can initially be revenue negative relative to previous pricing as customers ramp their new capacity. Enterprise AI readiness is also uneven. Management estimates roughly 40% of Global 2000 customers are still in AI pilot mode, so conversion from experiments to scaled agentic workflows will be staggered by sector and region. APAC’s 24% product growth, versus 31% in the Americas, reflects local regulatory and data residency friction, plus broader US China tech tensions. Macro risks extend to cybersecurity and cloud governance. With global cybercrime costs projected in the tens of trillions and Gartner estimating about 32% of cloud budgets are wasted spend, Snowflake’s governance and observability tools are both a selling point and a test. The company must prove that its AI infused governance layer tangibly reduces that waste to justify its premium pricing. Guidance embodies this push pull. Q4 FY26 guidance for $1.195B to $1.2B product revenue, around 27% YoY growth and 3.5% sequential growth, with 7% non GAAP operating margin, signals a temporary pause in margin expansion while Snowflake spends into AI sales capacity, Anthropic compute commitments and regional go to market. Full year FY26 guide of $4.446B product revenue (28% growth), 9% operating margin, 25% FCF margin and billings of about $5.1B (26% up) does, however, support the idea that this is investment driven, not structural deterioration. FY27 guidance will lean heavily on post holiday consumption patterns in January and February, which management flagged as the key watch window. 🧠 Analyst and Institutional Sentiment I see sentiment as constructive but not euphoric, which is exactly where I want to be as a stock picker. Post print, more than 15 firms raised targets. Rosenblatt moved to $275. DA Davidson reaffirmed $300. Oppenheimer nudged to about $295. The broader cluster in the target table shows Citizens at 325, TD Cowen at 300, Wolfe at 300, BofA at 310, with a floor around 270 from multiple houses. That leaves consensus essentially in the high 280s, implying 20% plus upside from the mid 230s if execution holds. Institutional flows back this up. Around 733 funds added SNOW over the past six months, lifting institutional ownership roughly 12% YTD. Insiders have executed about 231 trades, but management framed these as diversification, not a change in conviction, and there is no evidence of aggressive net selling. The company is countering dilution by repurchasing shares, with $233M spent this quarter, although in my view SBC still needs to trend lower as a percentage of revenue over time. On the options side, SNOW carries an SVS around 79, which means the stock has a long track record of moving more than implied volatility suggests. The presence of a $600K call buyer into this post earnings drop suggests some sophisticated traders are using the volatility to accumulate upside convexity. Real time sentiment on X skews about 70% bullish, with a strong focus on the Anthropic collaboration as a potential AI ARR accelerant into FY27. 📉📈 Technical Setup After Earnings I believe the chart currently shows a violent sentiment cleanse inside a still intact medium term uptrend. Intraday and short term On the 30 minute chart, SNOW spiked toward 268 into earnings, tagging the upper Keltner and Bollinger bands. The reversal candle was brutal, slicing from the upper band through the mid band and down to the lower magenta band in one session. That move filled the intraday gap and drove price straight into the gold band bottom and volume shelf at 239 to 240, roughly where the 100DMA sits. Four hour and daily On the 4 hour timeframe, Snowflake had been trending higher inside a broad channel from the low 200s, with EMA 13 and EMA 21 riding above EMA 55. The post earnings selloff punched through EMA 13 and EMA 21 and is now testing EMA 55 from above. RSI has cooled from overbought into the mid 30s. MACD has crossed negative but remains above the prior swing low, suggesting momentum reset rather than structural breakdown. Bollinger and Keltner bands have widened, reflecting short term volatility expansion. Key levels • Immediate support: 239 to 240 at the gold band bottom, 245.8 as minor intraday pivot, then 234.9 near the labelled Daily Bottom. Below that, a deeper support zone sits in the low 220s where prior bases formed. • Resistance: 245.8, then 250.5, 256.2 near the mid band, and 266.8 at the upper gap lip. Above that, the Daily Top region around 272.2 is the key ceiling. • As long as the 239 to 234 pocket holds on a closing basis, I treat this as an aggressive shakeout within a rising structure, not a broken trend. A close below 229 with heavy volume and RSI sliding into the low 30s would be my signal that the trend is shifting from accumulation to distribution. My technical base case sees consolidation between 234 and 256 while indicators reset. A successful retest and reclaim of 250.5 on rising volume opens a path back to 266 to 272. If the stock can clear 272 and hold, the analyst PT cluster around 285 to 300 becomes realistic over the next few quarters. 🌍 Macro and Peer Context I am framing this quarter against a macro tape where rates are off the peak, inflation is cooling at or slightly above 2%, and AI infrastructure capex remains one of the last uncut budget lines inside hyperscalers and enterprises. AWS management’s comment that only 15% to 20% of workloads have migrated off on premise gives vital context: Snowflake is still playing in the early innings of a multiyear data modernisation cycle. At the same time, the competitive bar is rising. Confluent is growing around 35%. Datadog is printing mid 30s growth with powerful observability tailwinds. Private Databricks hovers around a rumoured $100B valuation. All three remind investors that there are alternative platforms to park AI and data dollars. Snowflake’s differentiation is its combination of governance, high performance data warehousing, open table formats such as Iceberg, and AI agents tightly embedded into an existing consumption model. Macro cloud headwinds and governance challenges matter. Gartner pegs about 32% of cloud budgets as waste, and cybercrime losses are measured in the tens of trillions globally. Snowflake has to prove that its AI driven governance, FinOps controls and zero copy sharing across SAP, Salesforce, Workday, ServiceNow and other partners bring that waste down and harden data posture. APAC is the main macro weak spot, with regulatory constraints and geopolitical tension slowing migrations in parts of North Asia. 📊 Valuation and Capital Health I believe valuation remains the sharpest knife in this story. With FY26 product revenue guided to $4.446B and billings around $5.1B, Snowflake trades around 19 to 21 times forward revenue and a triple digit forward P E. That is a clear premium to most software peers growing in the 25% to 35% range. The bull case needs sustained high twenties revenue growth, eventual margin expansion into high teens or higher, and AI monetisation that pushes EPS above the current FY26 consensus of about $1.29. On the positive side, the balance sheet is fortress like. Roughly $1.94B in cash and equivalents and total liquidity near $4.4B, zero net debt, and strong FCF trajectory give Snowflake optionality to keep investing in AI partnerships such as Anthropic and to lean on buybacks to offset SBC. If management can gradually reduce SBC intensity from current levels while keeping FCF margins near or above 25%, the equity story will look considerably less dilutive. Relative to the long term opportunity, I see valuation as rich but not absurd if you believe Snowflake can evolve into the de facto neutral control plane for enterprise AI data and agents. Relative to near term decelerating growth, the multiple is unforgiving, which is why I treat entries carefully and respect technical levels. 📌 Key Takeaways 1. Q3 FY26 revenue reached $1.21B, up about 29% YoY, with product revenue at $1.16B and adjusted EPS at $0.35 versus an expected loss, confirming real operating leverage. 2. RPO climbed 37% YoY to $7.88B, current RPO rose 35% to about $2.95B, and NRR remained 125% with churn under 5%, showing that customers are committing more even as quarterly consumption remains lumpy. 3. AI has moved centre stage, with a $100M run rate across Cortex and Intelligence, 1,200 Intelligence customers, 7,300 weekly AI users, and AI influencing roughly 50% of bookings and 28% of deployments. 4. Valuation is demanding at roughly 19 to 21 times forward revenue and a triple digit forward P E, while SBC of about $442M and 32M shares of dilution remain the main capital structure headwinds despite $233M of buybacks. 5. The technical setup shows an 11% post earnings flush from around 268 to mid 230s, with price now testing key support at 239 to 240 near the 100DMA, and resistance stacked at 250.5, 256.2 and 266 to 272, with RSI reset into the mid 30s. 6. Analyst PTs average in the high 280s, institutions added in 733 cases over six months, and a $200M Anthropic commitment plus $2B AWS Marketplace milestone and 5,000 Accenture specialists position Snowflake to monetise the early innings of a multitrillion dollar AI and data modernisation cycle. ⚖️ Verdict and Trade Plan I believe this remains a high quality compounder with premium pricing, where the edge comes from understanding the volatility, not predicting every quarterly wiggle. My approach is to treat this selloff as a tactical opportunity, with respect for the risks. Trade framework • Primary accumulation zone: 239 to 242. This is where the 100DMA, gold band bottom and recent gap fill cluster. I like scaling in rather than all at once. • Secondary opportunity: 229 to 234 on a deeper liquidity flush. If price spikes into this zone with capitulation volume and RSI in the low 30s, I see that as a high reward area for patient capital. • Invalidation: a sustained close below 229 with heavy volume, weakening RPO growth below 30% and guidance that pushes FY26 or FY27 growth below mid 20s would make me reassess the premium. • Base target: recovery to 266 to 272 over the next one to three quarters as the market digests the Anthropic deal, AI consumption ramps and Q4 confirms stability. • Stretch target: 285 to 300 aligned with the current analyst PT cluster and prior congestion, contingent on FY27 guidance showing AI ARR acceleration and margins re expanding from Q4’s 7% toward the low teens. Confirmation signals I want to see include stabilising volume and tighter ranges around support, call skew building up in the options surface, ongoing evidence of institutional accumulation in 13F data, and continued growth in Snowflake Intelligence adoption metrics. 🏁 Conclusion I’m comfortable calling this a volatility reset in a structurally improving AI data platform, not the end of the story, as long as 239 to 229 continues to behave like a demand zone and RPO growth plus AI adoption stay on their current trajectory. I am backing the combination of accelerating backlog, early but powerful agentic AI traction and a fortress balance sheet over the short term fear around decelerating headline growth and near term margin compression. 📢 Don’t miss out! Like, Repost and Follow me for exclusive setups, cutting edge trends, and insights that move markets 🚀📈 I’m obsessed with hunting down the next big movers and sharing strategies that crush it. Let’s outsmart the market and stack those gains together! 🍀 Trade like a boss! Happy trading ahead, Cheers, BC 📈🚀🍀🍀🍀 @Tiger_Earnings @Tiger_comments @TigerObserver @TigerStars @TigerPicks @Daily_Discussion @TigerWire
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