Investment Highlights
Why It Matters
Which of these 2 stories sounds closer for this stock?
1. Generates cash flow
The stock generated 4% or more of the share price (called cash flow yield), and shows moderate 10-15% or more growth.
2. Riding a trend
Think Tesla during the pandemic of 2020 when EVs were riding a cultural high, or Nvidia in the current AI boom, or even Figma. These companies don’t have enough yield, or, enough growth, or both - however - they are riding a trend. They have momentum. These can be more volatile - they don’t have the floor of strong cash flow
0
Strong revenue growthRev Chg LTMRevenue Change % Last Twelve Months (LTM) is 28%
Not profitable at operating income levelOp Inc LTMOperating Income, Last Twelve Months is -1.5 Bil, Op Mgn LTMOperating Margin = Operating Income / Revenue
Reflects profitability before taxes and before impact of capital structure (interest payments). is -37%
1
Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 20%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 18%
Expensive valuation multiplesP/SPrice/Sales ratio is 21x, P/CFOPrice/(Cash Flow from Operations). CFO is cash before capital expenditures. is 105x
2
Stock price has recently run up significantly12M Rtn12 month market price return is 117%
3
Yield minus risk free rate is negativeERPEquity Risk Premium (ERP) = Total Yield - Risk Free Rate,
Reflects the premium above risk free assets offered by the investment. is -5.9%
0
Strong revenue growthRev Chg LTMRevenue Change % Last Twelve Months (LTM) is 28%
1
Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 20%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 18%
2
Not profitable at operating income levelOp Inc LTMOperating Income, Last Twelve Months is -1.5 Bil, Op Mgn LTMOperating Margin = Operating Income / Revenue
Reflects profitability before taxes and before impact of capital structure (interest payments). is -37%
3
Expensive valuation multiplesP/SPrice/Sales ratio is 21x, P/CFOPrice/(Cash Flow from Operations). CFO is cash before capital expenditures. is 105x
4
Stock price has recently run up significantly12M Rtn12 month market price return is 117%
5
Yield minus risk free rate is negativeERPEquity Risk Premium (ERP) = Total Yield - Risk Free Rate,
Reflects the premium above risk free assets offered by the investment. is -5.9%
Here are the key points for why Snowflake (SNOW) stock moved by 17.6% during the approximate time period from July 31, 2025, to November 8, 2025:
1. Robust Q3 FY2026 Financial Outlook
Snowflake reaffirmed strong revenue guidance for the third quarter of fiscal year 2026 (ending October 31, 2025), projecting product revenue growth of 25-26% and an estimated 55% year-over-year increase in earnings per share. This positive outlook signaled continued financial strength and favorable operational performance.
2. Strategic Partnership with SAP
The company announced a significant collaboration with SAP between November 4-6, 2025, to integrate Snowflake's AI Data Cloud with SAP's Business Data Cloud. This partnership is anticipated to drive AI-powered business transformation, streamline data sharing, and potentially extend Snowflake's market reach by tapping into SAP's extensive customer base.
Here are the key points for why Snowflake (SNOW) stock moved by 17.6% during the approximate time period from July 31, 2025, to November 8, 2025:
1. Robust Q3 FY2026 Financial Outlook
Snowflake reaffirmed strong revenue guidance for the third quarter of fiscal year 2026 (ending October 31, 2025), projecting product revenue growth of 25-26% and an estimated 55% year-over-year increase in earnings per share. This positive outlook signaled continued financial strength and favorable operational performance.
2. Strategic Partnership with SAP
The company announced a significant collaboration with SAP between November 4-6, 2025, to integrate Snowflake's AI Data Cloud with SAP's Business Data Cloud. This partnership is anticipated to drive AI-powered business transformation, streamline data sharing, and potentially extend Snowflake's market reach by tapping into SAP's extensive customer base.
3. Accelerated AI Data Cloud Innovation and New Product Features
Snowflake unveiled substantial advancements in its AI Data Cloud, including new agentic AI capabilities, developer tools like Cortex Code (in private preview), and the general availability of enhanced features such as Snowflake Horizon Catalog and Snowflake Openflow. These innovations bolster the platform's competitive edge and attract broader enterprise adoption.
4. Positive Analyst Sentiment and Increased Price Targets
Throughout the period, numerous financial analysts reiterated "Buy" or "Outperform" ratings for Snowflake and raised their price targets. For example, JMP Securities boosted its target to $325.00, and Mizuho, Stifel Nicolaus, Wells Fargo, Oppenheimer, Piper Sandler, and Scotiabank all issued positive ratings and increased price objectives, reflecting strong confidence in the company's growth trajectory and market position.
5. Growing Enterprise Adoption and AI-Driven Workloads
An increasing number of enterprises adopted and consolidated their workloads onto Snowflake's platform, driven by the expanding traction of AI-driven features like Snowflake Intelligence and Cortex AI SQL. This trend underscored the company's growing relevance in the market and sustained demand for its AI-ready data infrastructure solutions.
[1] Cumulative total returns since the beginning of 2020 [2] Peers: CRWD, DDOG, MDB, OKTA, TDC. See SNOW Returns vs. Peers. [3] Win Rate = % of calendar months in which monthly returns were positive [4] Max drawdown represents maximum peak-to-trough decline within a year [5] 2025 data is for the year up to 11/7/2025 (YTD)
Snowflake Inc. provides a cloud-based data platform in the United States and internationally. The company's platform offers Data Cloud, which enables customers to consolidate data into a single source of truth to drive meaningful business insights, build data-driven applications, and share data. Its platform is used by various organizations of sizes in a range of industries. The company was formerly known as Snowflake Computing, Inc. and changed its name to Snowflake Inc. in April 2019. Snowflake Inc. was incorporated in 2012 and is based in Bozeman, Montana.
[1] Choosing top 10 best bets from each sector quarterly is an alpha producing strategy vs sector benchmark [2] Historical annualized return of 24%, alpha of 2.9%, and sharpe of 1.04
MY | Getting CheaperMonopoly-Like with P/S DeclineLarge cap with monopoly-like margins or cash flow generation and getting cheaper based on P/S multiple
MY | Getting CheaperMonopoly-Like with P/S DeclineLarge cap with monopoly-like margins or cash flow generation and getting cheaper based on P/S multiple
MY | Getting CheaperMonopoly-Like with P/S DeclineLarge cap with monopoly-like margins or cash flow generation and getting cheaper based on P/S multiple
MY | Getting CheaperMonopoly-Like with P/S DeclineLarge cap with monopoly-like margins or cash flow generation and getting cheaper based on P/S multiple
[1] Upside and downside betas calculated using positive and negative benchmark daily returns respectively
Based On 1-Year Data
Comparison of SNOW With Other Asset Classes (Last 1Y)
SNOW
Sector ETF
Equity
Gold
Commodities
Real Estate
Bitcoin
Annualized Return
131.1%
29.4%
18.9%
45.7%
0.7%
-1.3%
52.4%
Annualized Volatility
58.3%
27.3%
19.6%
19.9%
16.1%
18.0%
37.2%
Sharpe Ratio
1.64
0.92
0.76
1.78
-0.14
-0.22
0.88
Correlation With Other Assets
51.9%
48.1%
2.0%
20.3%
25.6%
29.8%
ETFs used for asset classes: Sector ETF = XLK, Equity = SPY, Gold = GLD, Commodities = DBC, Real Estate = VNQ, and Bitcoin = BTCUSD Smart multi-asset allocation framework can stack odds in your favor. Learn How
Based On 5-Year Data
Comparison of SNOW With Other Asset Classes (Last 5Y)
SNOW
Sector ETF
Equity
Gold
Commodities
Real Estate
Bitcoin
Annualized Return
1.0%
22.0%
17.1%
15.9%
13.8%
7.2%
49.7%
Annualized Volatility
60.5%
24.6%
17.1%
15.6%
18.9%
19.1%
49.3%
Sharpe Ratio
0.26
0.80
0.81
0.82
0.61
0.29
0.76
Correlation With Other Assets
54.1%
50.6%
6.6%
8.8%
31.5%
24.3%
ETFs used for asset classes: Sector ETF = XLK, Equity = SPY, Gold = GLD, Commodities = DBC, Real Estate = VNQ, and Bitcoin = BTCUSD Smart multi-asset allocation framework can stack odds in your favor. Learn How
Based On 10-Year Data
Comparison of SNOW With Other Asset Classes (Last 10Y)
SNOW
Sector ETF
Equity
Gold
Commodities
Real Estate
Bitcoin
Annualized Return
0.7%
22.2%
14.3%
12.9%
5.1%
5.3%
77.8%
Annualized Volatility
61.1%
24.2%
18.0%
14.7%
17.7%
20.9%
56.2%
Sharpe Ratio
0.26
0.84
0.69
0.72
0.22
0.23
0.96
Correlation With Other Assets
53.1%
49.7%
7.0%
9.3%
30.8%
24.6%
ETFs used for asset classes: Sector ETF = XLK, Equity = SPY, Gold = GLD, Commodities = DBC, Real Estate = VNQ, and Bitcoin = BTCUSD Smart multi-asset allocation framework can stack odds in your favor. Learn How