1 Stock to Buy, 1 Stock to Sell This Week: Snowflake, Target

  • Moody’s U.S. credit downgrade, housing data, and retailer earnings will be in focus this week.

  • Snowflake is a buy with strong earnings, upbeat guidance on deck.

  • Target’s shrinking revenue, declining profit and weak outlook make it a stock to sell.

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The stock market ended higher on Friday, with the major averages registering sharp gains for the week driven by signs of a de-escalation of the U.S.- China trade war and renewed optimism over AI spending prospects.

For the week, the Dow Jones Industrial Average rose 3.4%, the S&P 500 climbed around 5.3%, while the tech-heavy Nasdaq Composite surged 7.2%. The strong week saw the Dow and S&P wipe out their losses for the year.

Wall Performance
Wall Performance

Source: Investing.com

More volatility could be in store this week as investors continue to assess the outlook for the economy, inflation, interest rates and corporate earnings. Late Friday, Moody’s downgraded the U.S. credit rating by one notch to ‘Aa1’ from ‘AAA’, citing rising debt and interest payments.

On the economic calendar, flash PMI readings on manufacturing and the services sector will grab attention on Thursday, along with updates on the housing market.

Interest rate futures suggest traders see a more than 90% chance that the Fed will keep rates unchanged at its June meeting, according to the Investing.com Fed Rate Monitor Tool.

Weekly Economic Calendar
Weekly Economic Calendar

Source: Investing.com

Elsewhere, in corporate earnings, results from major retailers such as Home Depot (NYSE:HD), Lowe’s (NYSE:LOW), Target (NYSE:TGT), and TJX Companies (NYSE:TJX) will be the key updates of the week as the reporting season quiets down. Other notable names lined up to report earnings include Palo Alto Networks (NASDAQ:PANW), Snowflake (NYSE:SNOW), Intuit (NASDAQ:INTU), and Baidu (NASDAQ:BIDU).

Regardless of which direction the market goes, below I highlight one stock likely to be in demand and another which could see fresh downside. Remember though, my timeframe is justfor the week ahead, Monday, May 19 – Friday, May 23.

Snowflake, the data analytics and cloud data management software provider, is positioned for a potential positive catalyst when it releases its first-quarter earnings report on Wednesday at 4:05PM ET.

Analyst sentiment has been notably positive heading into the print. According to InvestingPro data, profit estimates have been revised upward 19 times in recent weeks, compared to just ten downward revisions. This favorable revision ratio suggests growing confidence in Snowflake’s near-term execution and business momentum.

Snowflake Earnings Forecast
Snowflake Earnings Forecast

Source: InvestingPro

For the April-ended quarter, analysts expect adjusted profit to rise an impressive 51% year-over-year to $0.21 per share, with revenue projected to increase 22% to just over $1 billion. This growth trajectory demonstrates Snowflake’s continuing ability to expand its enterprise customer base despite broader technology spending concerns.

Once a data analytics pure-play, Snowflake has transformed into a comprehensive cloud data platform, capitalizing on the AI and big data megatrends. Its Cortex AI suite is gaining significant traction, empowering businesses to harness predictive analytics. Additionally, analysts have noted improving adoption of Snowpark, the company’s developer framework that expands use cases beyond traditional data analytics.

Given these dynamics, Snowflake’s management is well positioned to deliver strong sales guidance for the current quarter and beyond as it benefits from the strong upward trend in AI adoption rates, customer retention, and strategic growth initiatives.

Snowflake Chart
Snowflake Chart

Source: Investing.com

Market participants predict a sizable post-earnings swing in SNOW stock, with a possible implied move of 10.8% in either direction according to the options market. Shares – which have staged an impressive rally off the April 7 low of $120.10 – closed at $183.08 on Friday.

Despite concerns about its valuation, the technical picture for Snowflake is exceptionally strong, with “strong buy” signals across most short- and long-term timeframes. With an RSI of 72.5, the stock is in overbought territory—typically a cautionary sign, but in the context of pre-earnings momentum and strong fundamentals, this suggests powerful buying pressure.

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In contrast, Target faces a much more difficult environment as it prepares to release its Q1 financial results on Wednesday at 6:30AM ET. According to the options market, traders are pricing in a swing of 10.4% in either direction for TGT stock following the print.

Analyst sentiment has deteriorated significantly ahead of the report, with InvestingPro data showing all 22 analysts covering Target reducing their profit estimates – a unanimous expression of growing concern.

Target Earnings Forecast
Target Earnings Forecast

Source: InvestingPro

Wall Street projects earnings of $1.69 per share, falling nearly 19% from a year earlier, while revenue is anticipated to decline by about 1% to $24.4 billion. These projections indicate Target is struggling to maintain both top-line momentum and profitability in the current retail environment.

The big-box retailer is facing a plethora of headwinds, including slowing store traffic, reduced spending on discretionary goods, as well as potential margin pressure from proposed tariffs that could impact its supply chain and product costs.

Further complicating Target’s situation is customer response to the company’s diversity, equity, and inclusion (DEI) initiatives, with some analysts pointing to boycott activity affecting store traffic.

As such, I believe CEO Brian Cornell is likely to deliver cautious full-year guidance due to a challenging operating environment, competitive landscape, and concerns over potential tariffs.

Target Chart
Target Chart

Source: Investing.com

TGT stock –which fell below $100/share for the first time since April 2020 earlier this month– ended Friday’s session at $98.58. Shares, which are trading below their key moving averages, are down a whopping 27.1% in 2025, significantly underperforming the broader market.

It should be noted that Target currently has an InvestingPro ‘Financial Health Score’ of 2.5 out of 5.0 due to lingering concerns over weakening profit margins and spotty sales growth.

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Disclosure: At the time of writing, I am long on the S&P 500, and the Nasdaq 100 via the SPDR® S&P 500 ETF (SPY), and the Invesco QQQ Trust ETF (QQQ). I am also long on the Invesco Top QQQ ETF (QBIG), and Invesco S&P 500 Equal Weight ETF (RSP).

I regularly rebalance my portfolio of individual stocks and ETFs based on ongoing risk assessment of both the macroeconomic environment and companies’ financials.

The views discussed in this article are solely the opinion of the author and should not be taken as investment advice.

Follow Jesse Cohen on X/Twitter @JesseCohenInv for more stock market analysis and insight.

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