Snowflake and Gap: Two Hot Stocks with Elevated RSIs and Analyst Support

Two stocks, Snowflake and Gap, are running hot with RSIs in the mid-70s. Despite elevated RSI readings, analysts are calling for more upside. Snowflake's RSI is 75, but momentum is surging, driven by strong earnings and a growing reputation as a leader in data and AI infrastructure. Gap's RSI is 74, but the stock is approaching key resistance, which could set up a run toward 2021's peak. Analysts are supporting both stocks with Buy ratings and price targets suggesting more upside.

Two stocks, Snowflake Inc. (NYSE:SNOW) and Gap Inc. (NYSE:GAP), have been capturing investor attention with their significant price surges, each boasting RSI readings in the mid-70s. Despite these elevated RSI levels, which typically indicate overbought conditions, analysts remain bullish on both companies, suggesting further upside potential.

Snowflake Inc. (NYSE:SNOW)

Snowflake Inc. has seen its stock price soar to a 52-week high of $194.71, currently trading at $197.81 [1]. The company's strong performance has been driven by robust revenue growth of 29.21% and a market capitalization of $59.76 billion. Analysts have responded favorably, with price targets ranging from $115 to $440 [1]. The company's latest earnings report for the first quarter of fiscal year 2026 exceeded expectations, with product revenue rising 26% year-over-year to nearly $997 million [2]. CEO Sridhar Ramaswamy attributed the results to strong execution and the company's growing reputation as a leader in data and AI infrastructure. Analysts, such as JMP Securities, have reiterated their Buy rating and set a new price target of $245, suggesting another 22% upside from current levels [2].

Gap Inc. (NYSE:GAP)

Gap Inc. has also experienced a notable price increase, with shares up 66% since April, trading near their highest levels since the summer of 2024 [2]. The stock's RSI is currently at 74, indicating strong momentum. Analysts, including Citi, have reiterated their Buy rating and raised their price target to $33, implying more than 15% upside from current levels [2]. The retailer has shown resilience in navigating the volatile retail market, demonstrating discipline in inventory and pricing management. The company's technical strength, as indicated by a strong bullish MACD, makes it an attractive investment option.

Why Overbought Doesn’t Always Mean Over

The RSI is a valuable technical indicator, but it doesn't necessarily signal a sell-off when combined with strong fundamentals and analyst support. In trending markets, high RSI readings can be sustained for extended periods, especially when supported by earnings beats, raised guidance, and new analyst targets. Both Snowflake and Gap are examples of this dynamic in action, with both stocks up over 65% in less than two months [2].

Conclusion

Investors and financial professionals should closely monitor the performance of Snowflake and Gap as they continue to show strong momentum. Despite elevated RSI readings, the companies' fundamentals and analyst support suggest further upside potential. However, as always, investors should carefully consider their risk tolerance and conduct thorough research before making investment decisions.

References

[1] https://www.investing.com/news/company-news/snowflake-stock-hits-52week-high-at-19471-amid-growth-93CH-4059918
[2] https://www.investing.com/analysis/2-redhot-stocks-with-high-rsis-and-more-upside-to-come-200661408