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Snowflake (NYSE: SNOW) is no longer just a cloud data warehouse, it has evolved into a full scale data cloud platform that powers analytics, artificial intelligence, application development, and even operational databases.

With products like Snowpark, Cortex AI, and its recent expansion through acquisitions, Snowflake is embedding itself deeper into enterprise data strategies while broadening into new markets.

Its latest quarterly results reinforced why Snowflake is one of the most closely watched names in tech. The company continues to deliver strong growth, high customer retention, and expanding profitability, while raising its outlook for the year. At the same time, management sees a massive opportunity ahead as enterprises increasingly shift toward AI-ready data infrastructure.

But here’s the real question: are investors fully recognizing the AI-driven growth opportunity, or are near-term risks clouding Wall Street’s view? Despite strong execution, Snowflake currently trades at a premium valuation with expectations for rapid profit growth that may be difficult to sustain as the company matures.

Management has also guided for tighter margins in the near term, and its ambitious projections for future market size may take longer to realize than expected.

So, is Wall Street overlooking Snowflake’s long term AI potential, or is today’s optimism already priced into the stock?

Using the IDDA (Capital, Intentional, Fundamental, Sentimental, Technical), let’s break it down:

IDDA Point 1 & 2: Capital & Intentional

Before investing in Snowflake, ask yourself:

 Do you want exposure to a leading data cloud platform that sits at the center of AI and enterprise digital transformation?

 Are you looking for a company expanding its ecosystem through AI offerings, developer tools, and database acquisitions, all of which grow its relevance with large customers?

 Do you believe Snowflake can balance its rapid expansion with improving profitability, eventually justifying today’s valuation premium?

Snowflake has experienced massive growth since its IPO, but that growth has been paired with heavy volatility. After peaking around $404, the stock plunged to nearly $130 in 2022 and has since consolidated between roughly $130 and $238. For long term investors, the fundamentals remain compelling, with strong customer stickiness and AI-driven demand supporting future growth.

However, the stock remains volatile and has yet to see a meaningful recovery in its share price. Those with lower risk tolerance may find this level of volatility misaligned with their strategy and goals. While investors with shorter term strategies may capture profits from the swings, these opportunities come with higher risk.

IDDA Point 3: Fundamentals

Strong Q2 Performance

Snowflake posted an excellent Q2, with product revenue growth above 30% and net revenue retention reaching 125%. These results signal strong customer demand and efficient monetization of its platform. Operating margins also expanded to 11%, surprising even management, while remaining performance obligations grew significantly. Together, these metrics demonstrate both top line momentum and improving profitability, marking an inflection point in Snowflake’s financial trajectory.

AI-Driven Expansion

A major driver of growth is Snowflake’s focus on artificial intelligence. New offerings such as Cortex AI, Snowpark, and Snowflake Intelligence are enabling enterprises to run advanced queries, manage large-scale AI workflows, and integrate machine learning into their data operations. The recent acquisition of Crunchy Data also expands Snowflake into operational databases, further diversifying its platform. These AI initiatives reinforce Snowflake’s role as more than just a data warehouse provider, it is becoming a comprehensive AI-ready infrastructure player.

Expanding Total Addressable Market (TAM)

With these initiatives, Snowflake has substantially expanded its TAM. Management projects the market opportunity will nearly double from $170 billion to over $350 billion by 2029, as enterprises accelerate their shift toward AI-ready data systems. While some external research groups provide more conservative estimates, the long term direction is clear: demand for integrated data and AI platforms is growing rapidly. Snowflake’s ability to capture even a fraction of this TAM supports its long runway for growth.

Customer Growth & Retention

Snowflake’s business model continues to demonstrate strong stickiness. Its net revenue retention of 125% highlights how existing customers consistently expand spending by adding more modules over time. The “land and expand” approach is working effectively, as customers start with a core use case and gradually integrate additional Snowflake products, increasing switching costs. This upselling momentum strengthens long term relationships and creates a compounding growth effect across its customer base.

Financial Position & Profitability Outlook

From a financial standpoint, Snowflake remains well-capitalized with positive free cash flow and a healthy balance sheet. While near-term margins are expected to decline slightly from Q2’s strong showing, the company is steadily improving its operating leverage as revenue grows. Investments in AI, acquisitions, and sales efforts may weigh on short-term profitability, but they position the firm for durable growth. Long term, Snowflake’s expanding platform, customer stickiness, and growing addressable market provide a solid foundation for sustained revenue growth and margin improvement.

Fundamental Risk:Medium-High

IDDA Point 4: Sentimental

Strengths

Huge TAM in data warehouses/lakes, expected to grow at double digits for years.

AI and machine learning features drive customers to expand usage.

Only established SaaS database option, ideal for firms lacking strong IT teams.

Risks

Fierce competition from Databricks and cloud hyperscalers increases costs.

New customer growth may slow as focus shifts to upselling existing clients.

Premium valuation leaves stock vulnerable if growth slows.

Market sentiment on Snowflake is cautious optimism. On one hand, the company’s strong Q2 results, raised revenue guidance, and growing role in AI-driven data infrastructure fuelled enthusiasm, sending the stock up more than 13% after earnings. Investors see Snowflake as a clear beneficiary of the enterprise shift toward AI-ready platforms.

However, analysts also caution that future margins may not match Q2’s strength, suggesting that near-term expectations could be inflated. As a result, while Snowflake is widely recognized as a leader with strong momentum, sentiment remains cautiously optimistic, with many investors waiting for a 20 to 30% price correction before viewing it as an attractive long-term buy.

Sentimental Risk: High

IDDA Point 5: Technical

On the weekly chart:

 Ichimoku cloud is bullish, signaling upward momentum

 Candlesticks are trading above the cloud, which is acting as support

 Bullish engulfing pattern suggests a potential trend reversal to the upside

On the weekly chart, we can see massive volatility in the pattern, more so like in consolidation where the pattern will retrace 100%, in some cases, it’ll retrace past 100% to 127%. 

At the moment the Ichimoku cloud is bullish, signifying a bullish momentum and currently the candlesticks are above the cloud, with the cloud acting as a support zone. The last couple of candlesticks show a bullish engulfing pattern (short bearish candlestick followed by a large bullish candlestick – as a result of positive market sentiment from Q2 earning results) – which signifies a potential bullish reversal. 

The current market price has currently touched past the 234 resistance level. Provided positive market sentiment continues, we can expect further upward momentum, however if the 234 resistance holds, we can expect further consolidation volatility which investors may benefit from short term profit although this is high risk. 

(Click on image to enlarge)

Investors looking to get into SNOW can consider these Buy Limit Entries:

234.76 (High Risk)

194.55 (Medium Risk)

130.03 (Low Risk)

Investors looking to take profit can consider these Sell Limit Levels:

299.27 (Short term)

345.09 (Medium term)

404.00 (Long term)

Here are the Invest Diva ‘Confidence Compass’ questions to ask yourself before buying at each level:

1. If I buy at this price and the price drops by another 50%, how would I feel? Would I panic, or would I buy more to dollar-cost average at lower prices? (hint: this question also reveals your CONFIDENCE in the asset you’re planning to invest in).
2. If I don’t buy at this price and the stock suddenly turns around and starts going up again, will I beat myself up for not having bought at this level?

Remember: Investing is personal, and what is right for me might not be right for you. Always do your own due diligence. You should ONLY invest based on your own risk tolerance and your timeframe for reaching your portfolio goals

Technical Risk: High

Final Thoughts on Snowflake

Snowflake has grown far beyond its roots as a data warehouse, evolving into a diversified data cloud platform that powers analytics, AI, application development, and even operational databases.

Its latest results highlight strong growth, loyal customers, and improving profitability, while management continues to expand the ecosystem with offerings like Snowpark, Cortex AI, and the Crunchy Data acquisition. These moves reinforce Snowflake’s position at the center of digital transformation and AI adoption – the very “AI growth secret” that Wall Street may be underestimating.

At the same time, risks remain. The stock trades at one of the richest valuations in tech, with high profit expectations that may be tough to sustain as the company matures. Softer margin guidance and mounting competition from Databricks and cloud hyperscalers also add pressure. Technically, the stock shows bullish signs, but resistance at key levels suggests it could stay volatile, creating both opportunity and risk.

Key Takeaways:

 Snowflake is cementing itself as a leader in the AI-driven data cloud market, with strong fundamentals, sticky customer relationships, and a growing product portfolio. For long term investors, its central role in AI adoption makes for a compelling case, but the premium valuation leaves little room for error. For short term investors, volatility near resistance levels may provide swing-trading opportunities, but confirmation of a breakout is needed before chasing momentum.

Overall Stock Risk: Medium – High

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