Shares of Snowflake (SNOW) Incorporated closed today more than 14% lower after the company gave weak guidance as part of their quarterly earnings results.
The cloud-based data platform provides businesses with a centralized data consolidation platform which can be used for data sharing and analysis.
The company’s earnings report beat on earnings per share and revenue for the second quarter showing growth of 28.9% on a year over year basis. But it was the company’s outlook that has investors selling shares heavily today.
Snowflake’s management increased their quarterly guidance slightly, but that guidance would only reflect a 20-22% revenue growth estimate, far less than what investors have been looking for given the stock’s high valuation.
Shares of Snowflake sliced through their 20- and 50-day moving average, triggering a duo of technical selling triggers as the stock heads back to its recent lows of $108.
The stock’s long-term trend remains bearish as the stock is trading well below its 20-month moving average, a trendline that it snapped through in February following a poor earnings report.
Investors are likely to see Wall Street analysts follow this earnings report with downgrades to the stock as most analysts hold “strong buy” recommendations on SNOW stock.
NVIDIA (NVDA) shares fell 3.7% today to close today, just above its 50-day moving average at $120.00. The stock has spent the last four days trying to breakthrough $130.00 with much resistance Following a 43% rally since the stock hit its recent lows on August 5.
Investors were hit with a flurry of reports this morning as analysts came out reaffirming their guidance for invidious upcoming earnings announcement next week. In addition, several analysts pointed out that the possible delay of the company’s newest GPU, Blackwell, was not likely to cause concern over NVIDIA’s price valuation.
From a sentiment perspective, that last part should at least put investors on alert.
Historically, a stock like NVIDIA can become “priced for perfection” ahead of an earnings report. One signature of that situation is call from the media or analyst community that “all is well”, allowing investors to crowd into a trade with high expectations.
This can be even more true when a stock has seen a “buy the rumor” rally like NVIDIA’s recent 43% run higher.
Investors need to maintain a vigil eye on the price patterns for NVIDIA as they have played a heavy hand on the stock’s directional moves of late.
First, the 50-day and $120 price. Both provided strong support for NVIDIA in the month of July.
Next the $100. Another move below this price support will create a surge in technical selling with a target of $80. We’re not likely to see that before next week’s earnings results.
Last, $140. This is the price where the stock will gain breakout traction with a short-term target of $160. A break above $140 before next week’s earnings would be timely to trim positions as the market would likely see a “sell the news” reaction to anything other than perfection in NVIDIA’s earnings.
Shares of Intel (INTC) suffered a 6% decline today as a flurry of negative headlines hit the fragile stock.
Early afternoon headlines identified that the chip maker was down on reports that construction of new chip factories in Germany may be slowed as the company has undergone massive cost cutting initiatives.
The news was quickly followed up by the announcement that Intel's director Lip-Bu Tan will be leaving the company. Mr. Tan was brought in two years ago to assist with the chip maker’s much-needed turnaround.
The news wasn’t all bad for Intel today as analysts from Evercore issued a report forecasting stronger PC demand in 2025 as commercial and consumer demand should create a tailwind for chip manufacturers like Intel and AMD.
Intel’s shares recently posted a 15% rally after its post-earnings selloff that landed the shares at $20.
Today’s selling pressure pushed Intel shares to close at $20.10, slightly above the critical round-number $20 level.
Long-term investors should expect to see additional volatility if the stock breaks below $20 as the market will declare the recent rally as a “dead cat bounce”.
Intel’s long-term outlook remains bearish with a price target of $17.50.
