SNOW Value

Anyone remember who invested in Snowflake when it made its IPO debut in fall of 2020?

Warren Buffett’s Berkshire.

At what price?

$120 a share. And they invested $735 million dollars into SNOW. They bought at a market cap of $43.2B when SNOW only brought in 403M in trailing 12 month revenue.

Guess how SNOW is trading today?

$155 a share. It is currently at a market cap of $55.8B and it just did 1.217B in revenue over the last 12 months.

So, revenue has jumped over 3x (over 400%) and SNOW still grew last quarter revenues 102% YoY…yet the stock price is ONLY 29% above Berkshire’s purchase price.

Wading through the sea of off-topic posts, I see many say they are tapping out or selling out. Well, these people who do exit, really should get out - hypergrowth investing is not for everyone. Not everyone can tolerate volatility.
And everyone absolutely should take full responsibility for their investing actions.

But here is my question to those here who prefer staying on discussion of company fundamentals…Do you think Berkshire is capitulating out of Snowflake today? Do you think they are seeing there is no more future business/stock appreciation because of interest rates or ukraine or simply because their snowflake investment has dropped in tremendous value from peak?
Because I think that is precisely what some people are doing here. Selling only because the price is down.
Just my opinion.
I could be wrong about SNOW’s prospects in the future.
Berkshire could be wrong.

But I believe SNOW doing 3x more revenue than IPO day, while being only 29% more expensive than what Berkshire paid for it, equals a really great effing deal to buy more shares, and a horrible price to sell at the bottom.

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A few months back I posted that Google had an entire team just to fight Snowflake (a Compete Team as we call in Tech). I assume all hyperscalers and data SAAS companies have that now. They could succeed in keeping Snowflake down, or even shutting it down, but that’s not my bet. I will continue on SNOW until the story changes. We just have to pay a lot of attention, as this is a SAAS version of David x Goliath, in which I hope for the same type of outcome. But in reality, the “Golyaths” win more often than lose.
Just to keep in perspective, this is what you get if you goggle “Snowflake competitors”:

Amazon Web Services (AWS)
Microsoft.
Google.
Cloudera.
Oracle.
Teradata.
IBM.
Databricks.

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Just to keep in perspective, this is what you get if you goggle “Snowflake competitors”:

Amazon Web Services (AWS)
Microsoft.
Google.
Cloudera.
Oracle.
Teradata.
IBM.
Databricks.

Of the companies you listed. AWS is Snowe’s #1 partner with both AWS and SNOW highly motivated and incentivized to work together. It is a wonder and fruitful coopetition for both.

MSFT and SNOW work together in a similar fashion but less directly. AWS and SNOW are directly working together and both AWS and MSFT win as SNOW wins.

Google was mentioned by SNOW on the earnings call and SNOW is shaking their head wondering why Google is competing so hard. That Google is losing out on sales because of this. Google is a very distant third to AWS and MSFT and not closing the gap at all.

Teradata? SNOW has a large back log of companies porting their data from Teradata to SNOW. Teradata is basically a feeder for SNOW business.

Cloudera…also ran. Yesterday’s dream and now a rounding point.

IBM…fighting with Google, perhaps may catch up to Google and pass them, perhaps not. Working with SNOW would be a positive for them. If not, their clients will push them but either way, small part of the market like Google. Mongo is close with Google.

Oracle - competitor. Oracle strong. Always has been always will be. Has not impacted SNOW.

Databricks? Still smaller than SNOW, but is a new age presence. Some say Databricks and SNOW are used for different aspects of the market and only directly competitive on the margins. I don’t know. To date Databricks has not impinged Snow’s business. Probably vice versa.

Tinker

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A few months back I posted that Google had an entire team just to fight Snowflake (a Compete Team as we call in Tech).

Interesting, as Snowflake’s SVP of Engineering, Greg Czajkowski, came from Google, as did Tal Shaked and Shrikant Shanbhag. The latter two have blogs on why they left Google for Snowflake:

https://www.snowflake.com/blog/why-snowflake-was-my-next-str…

https://careers.snowflake.com/us/en/blogarticle/why-i-left-g…

Czajkowski wrote about how Snowflake does engineering in a blog “The Rocket behind Snowflake’s Rocketship” here: https://www.snowflake.com/blog/the-rocket-behind-snowflakes-…

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