Snowflake stock rose Friday amid an analyst upgrade ahead of the enterprise software maker’s earnings and annual user conference planned for early June.
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Shares of Snowflake (SNOW) rose 5.4% to 198.40 in early trading on the stock market today amid a market rotation out of software growth stocks.
Snowflake stock has retreated more than 50% from its all time high of 429 set on Dec. 8, Goldman Sachs analyst Kash Rangan said in a report to clients. He upgraded Snowflake to buy from neutral.
„The company expects to host its first analyst day alongside its annual user conference, Snowflake Summit, in early June,“ Rangan said. „We see the potential for the company to introduce a long-term outlook alongside additional details on new capabilities like support for unstructured data.“
Snowflake reports first-quarter earnings on May 26. One trading strategy for investors heading into company earnings reports is using call options.
In addition, Snowflake plans to host an investor day on June 10 to coincide with the annual user conference.
Snowflake Stock Retreats From Big IPO
Snowflake sells software that analyzes business data using cloud computing services from Amazon.com (AMZN) and others.
The Snowflake initial public offering on Sept. 16 raised $3.4 billion and set a record as the largest U.S. software IPO ever. With software companies out of favor, non-tech stocks are among IPO Leaders.
Rangan noted that Snowflake stock still trades at a high multiple of estimated 2022 revenue compared with other software stocks. Even so, he’s upbeat.
„Given the company’s strong competitive positioning, we continue to view Snowflake as well positioned to capitalize on a generational shift of data and analytics to the cloud, with strong secular tailwinds including cloud adoption, big data, artificial intelligence, and secure data sharing which we expect will drive durable growth for the foreseeable future,“ Rangan said.
In addition, many software companies are embedding AI tools in their products.
Snowflake stock holds a Relative Strength Rating of only 6 out of a best-possible 99. Meanwhile, the software stock needs to forge a new base to be actionable.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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