Trade Alert

Long Snowflake, Short C3ai

_{Posted by Club Member Bonds 8.11.23}

• Snowflakes’ Triple Threat: Topline growth from continued cloud migration; strong free cash flow margins; and an underappreciated AI kicker

• Datadog surged 28% on Tuesday, after the company reported stronger than expected Q3 earnings and full-year guidance. There’s likely some readthrough to what investors could expect to see in Snowflake’s quarterly results coming out in late November.

• Interest rates have likely peaked. If indeed the Fed is done hiking, and the markets begin pricing in a Fed cut somewhere in 2024, SNOW and other “speculative tech” could see further market support.

• The AI hype train pushed C3ai to $46, from $11 at the start of the year. I think C3ai is an “AI pretender”. The stock currently trades at $27.6, and will most likely keep fading as the hype around its “AI story” disintegrates.

• A Snowflake/C3ai spread trade, looks to be a compelling market-neutral trade to put on. The Short on C3ai should offer downside protection in the event there’s a broad base market rotation away from the “speculative tech” basket (e.g., if interest rates were to move dramatically higher again!).

View Comments - Join the discussion for this trade!  

#Snowflake #C3ai #New Ideas #Spread Trade

Recent Posts: Meta: great earnings report but bad price action?!

For more trade ideas visit the Daily Market Exchange.

Subscribe to receive more Trade Alerts.

About Us

The Daily Market Exchange is a global investment network.

It is a forum for elite market participants to exchange investment ideas and market views.

It is a platform for investors to collaborate and a hub for traders to share strategies.

Stock selection is hard, market timing harder so. Why do it alone?

Our members benefit from the network’s collective market insight and experience.

Have a stock idea, but not confident with your research to pull the trigger? Join our network and discuss your investment thesis with other members. Benefit from their sector experience and perspectives!

Struggling to find new investment ideas for your portfolio? Join our network and tap into our members’ latest ideas and research!