Barron's: $SNOW Finally Looks Attractive

Barron’s headline: Tech’s Tumble Has a Silver Lining—This Cloud Stock Finally Looks Attractive
By Eric J. SavitzFollow
May 27, 2022 6:54 pm ET

Salesforce CRM +1.63% (CRM) and Berkshire Hathaway BRK.B +2.12% (BRK.A) each agreed to invest $250 million in a private placement at the Snowflake IPO price, in parallel with the offering. Berkshire bought another $485 million worth of stock from a pre-IPO holder, boosting its bet to $735 million. A red-hot cloud company with the backing of Warren Buffett? You don’t see that every day.


Morgan Stanley analyst Keith Weiss thinks the forecast is too conservative—he’s modeling $14 billion in fiscal 2029 revenue. Weiss has an Overweight ratingand a $295 target price on the stock, implying it could more than double from recent levels.

While still not a value play, Snowflake now trades at a much more reasonable 13 times expected fiscal 2024 revenue of $3 billion—with a growth rate unmatched in software. The outlook remains strong, and the stock has been de-risked. At the current price, investors can buy a much larger version of Snowflake, two years later than Buffett, at about the same price. It’s hard to think of a more compelling argument to buy.