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With Warren Buffett’s blessing, Snowflake (SNOW) had one of the largest software IPOs in history. In the years that followed, the business kept growing but the stock did not.
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The business remains compelling, but valuation is still a key risk factor for prospective investors.
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The analyst who called NVIDIA in 2010 just named his top 10 AI stocks. Get them here FREE.
Snowflake (NYSE: SNOW) went public on September 16, 2020, and it was an event. Warren Buffett’s Berkshire Hathaway participation made it a headline moment for retail investors, who saw the Oracle of Omaha’s blessing as a green light. It was one of the largest software IPOs in history at the time, priced at a valuation assuming years of flawless execution. The first-day close of $253.93 reflected peak enthusiasm for cloud software in a zero-interest-rate world.
Then reality arrived. Starting in 2022, rising interest rates crushed high-multiple growth stocks. Snowflake, trading at triple-digit revenue multiples, was hit especially hard. The SaaS segment correction hit the entire category, but IPO buyers absorbed the full weight. The business kept growing, but the stock did not.
Here is what a $1,000 investment returned at different entry points.
READ: The analyst who called NVIDIA in 2010 just named his top 10 AI stocks
|
Total Return |
Current Value |
|
|
Since IPO |
−40.7% |
$594 |
|
5 Years |
−34.8% |
$651 |
|
1 Year |
+10.1% |
$1,101 |
The one-year picture is positive, but the IPO buyer is still sitting on a 40.7% loss after more than five years. The business delivered $4.684 billion in FY2026 revenue, up 29.16% year over year, with 125% net revenue retention and $9.77 billion in remaining performance obligations. While the company executed, the IPO price simply left no room for error.
The AI data cloud thesis, if it plays out over three to five years, represents the core bull case for the stock. Over 9,100 accounts are already using Snowflake AI features, and 45 of 51 analysts rate it a Buy or Strong Buy with an average price target of $234.44. Entering near $150 a share is fundamentally different from entering at $253.
The valuation remains a key risk factor for prospective investors. At a forward P/E of approximately 121x, the stock demands continued perfection. GAAP losses remain at −$1.329 billion for FY2026, and stock-based compensation hit $423 million in Q4 alone. A great company at the wrong price can cost you years.
For retirement investors, entry price is the thesis. Snowflake the business is compelling. Snowflake at $253 in September 2020 was a bet that nothing could go wrong, and that bet has not paid off.