The initial public offering of US technology company Snowflake last week was the equivalent of “yet more cases of champagne arriving at a party well after midnight when the guests are already several sheets to the wind”, says Robert Cyran on Breakingviews. The share price shot up by more than 150% at one point during the first day of trading. Even though shares subsequently fell back a bit, the company is now worth $63bn, compared with the valuation of just $12bn implied by a private funding round earlier this year.
It’s no surprise that investors – which include Warren Buffett’s Berkshire Hathaway – are enthusiastic about Snowflake, says Dan Gallagher in The Wall Street Journal. The firm’s cloud-based software “allows enterprises to rapidly analyse business information faster than traditional database software”. Revenue has “grown by an average of 141% on a year-over-year basis over the past four quarters”. Still, its “stratospheric valuation” will force Snowflake to keep up a “blistering pace” if it is not to disappoint. Even if the business continues to grow at the current rate over the next 12 months, it will still trade at “more than 70 times forward sales”.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
-
Revolut launches its first stocks and shares ISA with BlackRock and Vanguard ETFsA year after getting its UK banking licence, Revolut is now launching its first stocks and shares ISA with a suite of exchange-traded funds (ETFs) from BlackRock and Vanguard.
-
What does Trump’s ‘Big Beautiful Bill’ mean for the US economy?Donald Trump’s budget bill will slash taxes, but is expected to add at least $3 trillion to US national debt
-
Cybersecurity stocks: why now might be the time to buyCyber attacks can cost companies millions. Here’s how to invest in the firms fighting back and profit from cybersecurity
-
AJ Bell: a fine British fintech going cheapOpinion Don’t overlook investment platform AJ Bell, a significantly undervalued British business with an excellent financial base
-
Microsoft’s partnership with OpenAI is on the rocksMicrosoft’s joint venture with OpenAI, the developer of ChatGPT, appears to be in trouble. What now for the two groups?
-
Carson Block on short-selling and what investors should watch out for when going longInterview Renowned short seller Carson Block talks to Matthew Partridge about his specialism and where to go long
-
Investors can buy into tomorrow’s top global technology stocks todayOpinion Anthony Ginsberg, manager of HAN-GINS Tech Megatrend Equal Weight UCITS ETF, highlights three technology stocks as he tells us where he'd put his money
-
Drinks maker Diageo gets back on its feet – should you invest?Diageo has faced one disaster after another over the past two years. Is it finally time to buy?
-
Halma reaches new all-time highProfits at Halma, one of Britain’s best blue chips, have hit a new record. But could US tariffs now cloud the outlook?
-
Airtel Africa is dialling the right numbers – should you buy?Opinion Mobile phone services group Airtel Africa is inexpensive and growing fast
