The Rise of Snowflake: What Investors Need to Know
Welcome to Extreme Investor Network, where we dive deep into the latest trends and insights in the investing world. This week, we shine a spotlight on a familiar face that has made its way back into the limelight: Snowflake (SNOW).
The Snowflake Story: A Quick Recap
When Snowflake debuted in September 2020, it marked the largest IPO in history, raising an astounding $3.36 billion. Investors were ecstatic about cloud computing stocks, and Snowflake’s initial public offering was met with overwhelming enthusiasm, with shares climbing from an initial price of $120 to a staggering $300 on the first day alone. With a starting valuation of $75 billion, many believed Snowflake was destined for greatness.
However, like a rollercoaster, the stock’s journey has been tumultuous. By Thanksgiving the following year, Snowflake reached its zenith at $401.89, only to plummet over 70% to an all-time low of $107 by September 2024. Investors who held since the IPO experienced heart-wrenching losses amid significant volatility.
A New Chapter Unfolds
What happens next is where the riveting comeback story begins. The company’s leadership saw a significant shift; the CEO transitioned to the role of Chairman, making way for the head of AI to step into the C-Suite and take a seat on the board. This strategic move aimed to revitalize Snowflake’s direction and performance.
Recently, Snowflake reported consecutive quarters of 25% growth, surprising Wall Street with its upside potential. Although still trading 50% below its all-time highs, Snowflake’s stock has doubled from its lows and showcases a promising upward trajectory.
The Current State of Snowflake
As of May 27, 2025, Snowflake made its way onto our Best Stocks in the Market list, further solidifying its re-emergence. The company operates within the IT Services sector, with software-related stocks currently leading the pack. The iShares Expanded Tech-Software Sector ETF (IGV) has returned 20% over the past year, nearly doubling the performance of the Nasdaq 100.
Data Management in AI
Snowflake is not just another data platform. It empowers organizations to store, manage, and analyze mountains of data seamlessly across multiple cloud environments. In an age where artificial intelligence is becoming increasingly prevalent, having clean, organized, and unified data is crucial for successful machine learning and model training.
While the chart of Snowflake may not be the prettiest for traders, with clear downtrends since its inception, the situation is beginning to change. If the stock can maintain support around the $190 mark, it may signal a reversal as it begins to attract attention from bullish investors.
Financial Fundamentals
For long-term investors, the fundamentals are showing signs of resilience. In its latest earnings call, Snowflake exceeded both revenue and earnings forecasts. Here are some highlights:
- Revenue grew by 4%.
- Earnings Before Interest and Taxes (EBIT) surged 74%.
- Earnings Per Share (EPS) saw a 13% increase year-over-year.
Snowflake now boasts 606 companies contributing over $1 million in revenue each, reflecting a 27% year-over-year increase, along with gross margins expanding from 59% in 2021 to 67% today.
A noteworthy metric is its net revenue retention rate of 124%, indicating existing customers are spending significantly more. This is a strong indicator of customer loyalty and long-term growth potential.
Navigating Market Risks
For those monitoring Snowflake’s performance, a keen eye on the stock’s movement is essential. Recently, following a parabolic rise, the stock has returned to its February highs. Traders may look for a buying opportunity on low volume pullbacks into the $190 range, using the $175–$180 area as critical support.
Long-term investors should pay attention to the flat-lining 200-day moving average currently around $160, potentially employing it as a stop-loss guideline.
Conclusion: The Road Ahead
As we look toward the future, Snowflake presents an intriguing case for investors willing to navigate the uncertainties of the tech market. While the stock faces challenges, its recent turnaround, robust customer growth, and improving fundamentals create a compelling narrative.
At Extreme Investor Network, we believe in empowering our readers with actionable insights and thorough analysis. Stay tuned for more updates as we continue to track the progress of Snowflake and other promising investment opportunities.
Disclaimer: The opinions expressed in this article are solely those of the authors and do not represent the views of Extreme Investor Network. Always consult with a financial advisor before making any investment decisions. Investing carries risks, and past performance is not indicative of future results.