Why I Finally Bought Snowflake Stock
Summary
In this new era of rapid generative AI infrastructure build-out (which is being spearheaded by Nvidia), surely Snowflake can capture more market share. The good news is that new CEO Ramaswamy has a deep software engineering pedigree, having served in top roles at Alphabets Google. Thats all relative, to be sure: Its still trading at more than 70 times free cash flow as of this writing, and one must also factor in the expectations for a sub-30% revenue growth rate. For its current valuation to make sense, Snowflake will need to generate several years of double-digit-percentage revenue growth and profit margin increases. Though Snowflake is entering a new phase of its history -- one in which it will have to deal with more moderate expectations -- I like its prospects in the vast and still fast-growing cloud computing industry.
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