Buy or Sell Snowflake Stock Ahead of Earnings?

Core Insights - Snowflake Inc. (NYSE: SNOW) is expected to report Q2 FY'26 results on August 27, 2025, with earnings projected at $0.27 per share, up from $0.18 per share year-over-year, and revenues anticipated to rise by 25% to $1.09 billion, driven by increased adoption of cloud-based data warehousing solutions [2] - The company has a market capitalization of $64 billion and generated $3.8 billion in revenue over the past twelve months, despite reporting operational losses of $1.6 billion and a net income loss of $1.4 billion [3] Revenue Growth and Strategic Investments - Revenue growth is likely supported by strategic investments in artificial intelligence, particularly through offerings like Snowflake Cortex, which integrates AI-driven features into the Snowflake data cloud [2] - Snowflake has achieved a net revenue retention rate of 124% as of the last quarter, indicating strong expansion among existing clients [2] Historical Performance and Trading Strategies - Over the last five years, Snowflake has recorded 19 earnings data points, with 11 positive and 8 negative one-day (1D) returns, resulting in a positive return rate of approximately 58% [9] - The median of the 11 positive returns is 7.8%, while the median of the 8 negative returns is -14% [9] - Analyzing the correlation between short-term and medium-term returns post-earnings can inform trading strategies, particularly if a high correlation exists between 1D and 5D returns [8][10]