Snowflake (SNOW) Surges 20% on Earnings Beat and AI-Driven Optimism—What’s Next for the Cloud Giant?

Summary
• Snowflake (SNOW) rockets 20.57% intraday, hitting a 52-week high of $242.37
• Earnings beat and AI-focused guidance drive 30% YTD rally
• Options frenzy: 26M shares traded, with call options surging 300%+
• Analysts split: $233.55 average target vs. $328.07 GF Value estimate

Snowflake’s meteoric 20% intraday surge has ignited a frenzy in the cloud computing sector, fueled by a rare combination of earnings outperformance and AI-driven optimism. With the stock trading near its 52-week high and options volume spiking to 8.2% of the float, the market is betting big on Snowflake’s role in the AI revolution. This analysis unpacks the catalysts, technicals, and high-conviction options plays for traders navigating this volatile momentum trade.

Earnings Beat and AI Guidance Ignite Bullish Sentiment
Snowflake’s 20.57% intraday surge was catalyzed by a 94% surge in adjusted EPS to $0.35 and a 32% YoY revenue jump to $1.14 billion, both exceeding Wall Street estimates. The company’s strategic pivot toward AI—highlighted by CEO Sridhar Ramaswamy’s emphasis on data operationalization for AI workloads—has repositioned Snowflake as a critical infrastructure layer for enterprise AI adoption. The 27% full-year revenue guidance hike to $4.4 billion and Q3 product revenue forecast of $1.12–$1.13 billion further solidified investor confidence, with 6,100 active AI accounts and a 125% net revenue retention rate underscoring recurring revenue strength.

Cloud Computing Sector Rally Gains Steam as AI Demand Accelerates
The cloud computing sector has rallied alongside Snowflake’s breakout, with Amazon (AMZN) up 1.2% as AI infrastructure spending intensifies. While Snowflake’s 20% move outpaces AMZN’s 1.2% gain, the sector’s broader momentum reflects growing demand for scalable data platforms. Snowflake’s AI-specific positioning—versus Amazon’s broader cloud offerings—has amplified its valuation premium, with the stock trading at 14x next-year sales versus AMZN’s 10x. This divergence highlights the market’s willingness to pay a premium for AI-native infrastructure plays.

High-Leverage Call Options and ETFs for AI-Driven Momentum
• 200-day MA: $178.94 (well below) | RSI: 43.37 (oversold) | MACD: -3.99 (bullish crossover pending)
• Bollinger Bands: $183.55–$215.82 (price at upper band) | 30D support: $194.27–$194.91

With Snowflake trading near its 52-week high and RSI at oversold levels, the technicals suggest continuation of the AI-driven rally. Key resistance lies at the $242.37 52-week high, with a break above triggering a test of the $260–$280 range. The options chain reveals aggressive bullish positioning: 11M shares of calls traded, with the 240-strike call (SNOW20250905C240) and 245-strike call (SNOW20250905C245) as top picks.

• SNOW20250905C240 (Call):
- Strike: $240 | Expiry: 2025-09-05 | IV: 39.78% | LVR: 33.61% | Delta: 0.572 | Theta: -0.9478 | Gamma: 0.025958 | Turnover: 4.3M
- IV: 39.78% (moderate) | LVR: 33.61% (high leverage) | Delta: 0.572 (moderate sensitivity) | Gamma: 0.025958 (high sensitivity to price moves)
- This contract offers a 313% leverage on a 5% upside scenario (target price: $253.69), with high gamma ensuring rapid premium gains if the stock breaks above $240.

• SNOW20250905C245 (Call):
- Strike: $245 | Expiry: 2025-09-05 | IV: 39.82% | LVR: 50.42% | Delta: 0.441 | Theta: -0.8119 | Gamma: 0.026078 | Turnover: 1.29M
- IV: 39.82% (moderate) | LVR: 50.42% (high leverage) | Delta: 0.441 (moderate sensitivity) | Gamma: 0.026078 (high sensitivity)
- With 50.42% leverage and 0.026078 gamma, this contract amplifies returns if Snowflake sustains above $245, projecting a 287% payoff on a 5% move.

Aggressive bulls should consider SNOW20250905C245 into a break above $245, while core positions can target the 240-strike for a lower-cost entry. Both contracts benefit from high gamma and moderate IV, ideal for a continuation of the AI-driven rally.

Backtest Snowflake Stock Performance
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Snowflake’s AI Momentum Unlikely to Slow—Act Now on High-Leverage Call Options
Snowflake’s 20% surge is a textbook example of AI-driven momentum, with technicals and fundamentals aligning for a continuation. The stock’s proximity to its 52-week high and oversold RSI suggest further upside, while the options chain reveals aggressive bullish positioning. With Amazon (AMZN) up 1.2% as the sector leader, the broader cloud computing rally reinforces Snowflake’s AI-native positioning. Traders should prioritize the SNOW20250905C245 call for high leverage and gamma exposure, targeting a $253.69 price level. Watch for a breakdown below $218.09 (intraday low) to trigger a reversal, but for now, the AI tailwind is unrelenting.