Snowflake is a cloud data platform company that lets business customers consolidate data from multiple clouds and other sources. After the company’s 2020 initial public offering the price of its shares rose sharply, attracting the attention of hedge funds and other investors. Although it has yet to produce profits since going public, Snowflake is still on many Buy lists. Its shares trade on the New York Stock Exchange under the symbol SNOW and can be purchased through most trading platforms, online brokers and traditional brokers. Consider working with a financial advisor as you start picking stocks.
Snowflake Background
Snowflake’s primary product is Data Cloud, a global network that helps organizations combine business data that is being stored in multiple public clouds. Once consolidated through Data Cloud, the combined data can be used analyze, warehouse and share data and support business decision making and application development. Data Cloud is also said to help companies save money.
Snowflake was founded in 2012 and is based in San Mateo, California. It has thousands of customers, including many Fortune 500 firms, all over the world and approximately 2,500 employees. The company’s management is regarded as experienced and capable.
Snowflake held its initial public offering (IPO) in September 2020, raising $2.2 billion by selling 28 million shares at an average valuation of approximately $80. The stock immediately began trading at more than double the IPO price, and by the end of the year was trading at over $400. Since then, the share price has retreated to less than half the peak, but it is still well above the initial offering price.
Although it generates sizable revenue, Snowflake had not reported any profit as of mid-2021. Sales came to approximately $555 million in revenue in fiscal 2021, which ended Jan. 31, and it posted a $544 million operating loss for the year.
However, its sales are growing strongly. The $214 million in revenue reported for fiscal 2022’s first quarter, ended April 30, was more than double the amount for the same period in fiscal 2021. The quarter’s operating loss still came to $206 million. And management has revealed plans to reach $10 billion in revenue by 2028 and achieve a 10% operating profit.
How to Buy Snowflake
Snowflake shares are listed on the New York Stock Exchange under the symbol SNOW. Investors can purchase shares using any online or traditional brokerage. This includes trading platforms such as Robinhood and Webull as well as the likes of Charles Schwab, E*Trade, Fidelity and Vanguard Brokerage Services. In order to purchase shares of Snowflake or other listed companies, investors need first to open an account with a brokerage. Online brokers and trading platforms offer convenience, while traditional brokers who meet with customers face to face or by telephone can offer additional services including research and advice.
Opening an account requires filling out an application with the brokers, funding the account with some money to pay for trades and entering payment details to fund additional cash transfers if needed. Before purchasing stocks, investors should research the company and satisfy themselves that it is a sound investment. They can do this by checking the company’s quarterly reports and other filings with the Securities and Exchange Commission, reading analyst reports provided by their brokerage and keeping tabs on published news about the company. After investing in a stock, it is important to monitor the shares’ performance and, if necessary, adjust the overall portfolio to maintain appropriate levels of risk and diversification.
Bottom Line
Snowflake is a fast-growing cloud software provider that many large companies use to consolidate data stored on different cloud services. The company had a successful IPO in 2020 and its shares have traded well above the offering price since. Snowflake has landed on many investors’ Buy lists in part because its shares have been purchased by some well-known and highly respected financial names. In Snowflake’s case, this group has included famed investor Warren Buffett, as well as number of hedge funds. Purchasing shares in Snowflake, which lists on the NYSE under SNOW, can be done through nearly any online or traditional brokerage or trading platform.
Tips on Investing
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Investing in shares of any public company requires an understanding of how equity markets work and how the company’s fundamentals compare to others in its industry and competing investment opportunities. SmartAsset’s free tool matches you with financial advisors in your area in five minutes. If you’re ready to be matched with local advisors who will help you achieve your financial goals, get started now.
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In addition to working with a financial advisor be sure to make use of our free investment calculator to give you a quick estimate of how your portfolio will do over time.
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