Snowflake's Options Hedge Deepens as the Print Approaches

Snowflake heads into its June 29 earnings report with options traders running the most defensive posture of the past year — a signal that has only intensified since the previous note flagged the same tension nine days ago.

The options picture is now the dominant story. The put/call ratio hit 0.82 on June 25, nearly three standard deviations above its 20-day average of 0.72 and within touching distance of the 52-week high of 0.84. That is an escalation from the four-sigma reading flagged in the June 17 article, and it has held elevated for multiple sessions rather than fading. The stock itself has retreated from $238 to $225.95, down roughly 4% on the week, giving the hedging activity a concrete backdrop rather than looking like abstract nervousness. Borrow conditions add little to the bear case — availability is deep into normal territory at over 2,000%, and cost to borrow remains near 0.47%, effectively free. There is no squeeze pressure and no sign that short sellers are scrambling for shares.

Short interest confirms that the pessimism is measured rather than extreme. Bears hold 21.8 million shares, 6.4% of the free float — unchanged from where the prior note left it, with the 30-day build of 27% now appearing to plateau rather than accelerate. The week-on-week change is essentially flat at -0.1%, and daily readings have clustered tightly between 21.8 million and 22.0 million for more than a week. That plateauing short base, combined with loose borrow, means the options hedging is coming from existing holders buying protection — not from new shorts pressing a directional view.

The analyst community remains constructively positioned but with notable internal disagreement on valuation. The wave of target raises in early June — UBS moving to $370, Scotiabank to $320, Needham to $330 — pushed the consensus mean to $292, implying roughly 29% upside from current levels. But Macquarie's $200 hold and Barclays' equal-weight at $285 illustrate that not everyone is comfortable with the price-to-earnings multiple near 99x or EV/EBITDA above 62x. The bull case centres on the CoCo platform momentum and AI-driven consumption growth. The bear case is straightforward: a still-unprofitable business trading at a premium that leaves no room for a guidance miss, in a sector where MongoDB just fell 13% on the week and BigBear.ai dropped 11%.

The print on June 29 will test whether the consumption acceleration that drove the May quarter's 35% single-day rally is repeating — or whether that quarter was an outlier that the current multiple has already priced in full.