Snowflake: a very special IPO
The price of US technology company Snowflake, which floated last week, shot up by more than 150% at one point during the first day of trading.

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”.
The big question is whether Snowflake’s “nosebleed” valuation heralds a runaway shift in market sentiment, says Richard Waters in the Financial Times. It is “hard not to see at least some similarities with the dotcom era”, especially the obsession with “total addressable market” instead of sales or profitability. A new tech bubble might be good for Palantir, which uses similar technology to Snowflake. After years of “dithering about whether or not to go public”, Palantir’s shares will soon start trading in a direct listing.
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
Sign up for MoneyWeek's newsletters
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.
He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.
Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.
As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.
Follow Matthew on Twitter: @DrMatthewPartri
-
8 of the best properties for sale by the sea
This week: the best properties for sale beside the sea – from a six-storey Georgian townhouse in Tenby, Pembrokeshire, to a house on Scotland’s Knoydart peninsula overlooking the Sound of Sleat
By Natasha Langan
-
Is UK prime property making a comeback as a safe haven asset?
Cheap prime central London property is attracting overseas buyers, helping it regain its safe haven status
By Marc Shoffman
-
Out of America's shadow: Why Trump's tariff chaos may be good for non-US stocks
Opinion Upending global investment and trade could benefit other countries at the expense of the US market, says Cris Sholto Heaton
By Cris Sholto Heaton
-
BP's 'long, painful decline' – and why next year could be even tougher
Opinion Long-suffering shareholders in oil giant BP have been pushing for change. It won’t come soon enough, says Matthew Lynn
By Matthew Lynn
-
Investment trusts tap the profits in exotic and obscure global markets
Opinion Peter Walls, manager of the Unicorn Mastertrust fund, highlights three investment trusts as he shares where he'd put his money
By Peter Walls
-
Falling revenues and mounting debt spell trouble for Jumia Technologies
Struggling African e-commerce platform Jumia Technologies looks headed for the exit, says Dr Matthew Partridge.
By Dr Matthew Partridge
-
Next reports £1 billion in annual profits for the first time – what's next for the retailer?
Clothing retailer Next has become only the fourth member of its sector to surpass £1 billion in annual profits. What does this mean for the company's future?
By Dr Matthew Partridge
-
Best of British bargains: cash in on undervalued companies in the UK stock market
Opinion Michael Field, Chief Equity Market Strategist, EMEA, Morningstar, selects three attractive UK stocks where he'd put his money
By Michael Field
-
Building firm Keller presents low debt and ample scope for growth
Geotechnical contractor Keller, which supports vital global infrastructure, boasts rising profits and a cheap valuation
By Dr Mike Tubbs
-
PZ Cussons share price down 75% in last decade – why it's one to watch
Opinion Once-strong consumer-goods business PZ Cussons is out of favour with the market. That spells opportunity for investors, says Jamie Ward
By Jamie Ward