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Breakout Watch: This AI-Fueled Palantir Peer And Nvidia Partner Is No Flake
  
Hailing from the artificial intelligence-fueled enterprise software industry alongside Palantir Technologies ( PLTR), Snowflake ( SNOW) sports a powerhouse partner network that includes Nvidia ( NVDA), Microsoft ( MSFT) and Amazon.com ( AMZN) through its Amazon Web Services (AWS) business. Now as Snowflake stock molds a new buy point, it has locked in a spot on the Investor's Business Daily Leaderboard.
A pending breakout is just one reason Snowflake has popped back onto Wall Street's radar. A string of positive fundamental and technical indicators put Snowflake among the top AI stocks to watch alongside Nvidia, Palantir and Microsoft.
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Snowflake Rejuvenates Profit GrowthHeadquartered in Bozeman, Mont., Snowflake created the AI Data Cloud. Used by hundreds of the world's largest companies, its AI Data Cloud helps clients build, use and share data, applications and AI-fueled solutions. According to the company, Snowflake works with 751 of the Forbes Global 2000 companies.
Even as earnings growth stalled out for much of fiscal 2024 and the first quarter of fiscal 2025, Snowflake has continued to generate solid double-digit sales growth. Over the last eight quarters, the company has delivered revenue growth ranging from 26% to 33%.
In its latest report on Aug. 27 — for the second quarter of fiscal 2026, ended July 31 — Snowflake reported 32% sales growth to just over $1.14 billion.
Building on its recent turnaround in profitability, it posted a 94% spike in earnings to 35 cents per share last quarter. When Snowflake next reports at the end of November, analysts forecast 26% sales growth to $1.18 billion and earnings growth of 56% to 31 cents per share.
For the full fiscal year, Wall Street expects 45% earnings growth to $1.20 a share. For fiscal 2027, analysts see Snowflake posting 37% earnings growth to $1.65 a share.
Snowflake Stock Bounces BackSince going public in September 2020, Snowflake stock has encountered its share of stormy weather. But boosted by the recent turnaround in earnings growth, shares have perked up. The stock is now flashing several positive technical indicators.
Since popping back above its 10-week moving average in August, Snowflake has held support at the benchmark while forming a new flat base. The Nvidia and Microsoft partner briefly cleared a 249.99 buy point last week before retreating on Friday's sell-off on the Nasdaq.
But showing resilience as it rebounds, the new base remains intact as Snowflake stock looks to jump back into buy range.
Signs of demand include a 1.3 up/down volume ratio and a B Accumulation/Distribution Rating. Snowflake's relative strength line earns a coveted blue dot in MarketSurge, an indicator of market leadership.
Another sign of rising technical strength is how Snowflake's 21-day exponential moving average climbed back above the longer-term 50-day line in September. And on Monday, Snowflake kicked off the new week by jumping back above the 21-day line.
Meanwhile, Nvidia trades within buy range and Palantir looks to refurbish a recent breakout. Amazon has fallen below its 50-day line while Microsoft fights to hold support at that benchmark.
So as the Nasdaq looks to recover from Friday's loss, investors should keep in mind rules for both how to buy stocks and when to sell.
Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.
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