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Alexander Green’s #1 Tech IPO
My #1 Tech IPO started breaking records right out of the gate.
2020 was the best year for initial public offerings (IPOs) we’ve seen in ages…
And it was cloud software and data-warehousing company Snowflake (NYSE: SNOW) that was the IPO superstar.
Snowflake raised $3.9 billion with its IPO, which made it the largest software IPO of all time.
The stock was initially priced at $120 a share, and that price more than doubled on the first trading day.
And the company has been accumulating accolades and very savvy investors ever since.
Warren Buffett – who famously dislikes both IPOs and tech companies – made his first IPO investment since 1956 in Snowflake. Buffett’s Berkshire Hathaway owns more than 6 million shares.
Sequoia Capital – the firm that backed Google, Apple, Oracle, PayPal and YouTube – invested $271 million! It’s Snowflake’s largest shareholder.
With some of the smartest money on Wall Street taking a stake… I’m in good company when I say Snowflake could be one of the best-performing stocks of the next decade.
But up to this point… Main Street still hasn’t caught on to the potential here. That gives you a real opportunity to get in early on this technology trailblazer.
Snowflake is just getting started on a long… long… runway of growth ahead.
There are big gains to be pocketed. Here’s why…
The $1.3 Trillion Opportunity
According to IBM, we’ve created more than 90% of the world’s data in 2019 and 2020 alone. That’s more data than had been created in all of human history, and we’re only going to create more as we become more reliant on our computers and devices.
The cloud computer market size is on track to reach more than $1.32 trillion by 2025.
Of course, “the cloud” is a term we’ve all become familiar with. It’s comprised of off-site data storage platforms and servers that are accessed via the internet.
Companies have been moving to the cloud in recent years because of the cost-efficiency, technology benefits, consumer demands… and the immediate improvement to corporate profits.
The pandemic only accelerated the push to the cloud. With more people working remotely and more devices connected to the internet… demand for cloud services is booming.
And, even though many people have since returned to their offices, many companies are adopting hybrid models. Employees are now often free to work from home part–time.
As a result, businesses across the globe are practically beating down Snowflake’s door. And there’s a reason they’re coming to Snowflake… It’s a one-stop shop for cloud services.
Snowflake’s wide range of cloud-based products provides everything a client might need.
The company aims to eliminate the cost and complexity of integrating all the traditionally disparate network hardware and software… and it’s succeeding!
The Results Speak for Themselves
This company has more than 5,400 customers around the world. Customers include 223 of the Fortune 500 companies and 70% of the ultra-exclusive Fortune 10 companies – the best of the best.
Snowflake grew revenue by 173% from 2019 to 2020.
Business kept chugging along in 2021.
Here are the highlights from its fiscal 2021 third quarter – which ended in October 2021 – compared with the same quarter of the previous year.
- Revenue jumped 110% to $312.5 million.
- Business backlog grew by 94% to $1.8 billion.
- The number of customers spending more than $1 million grew 128%.
- The number of Fortune 500 customers reached 223, nearly half of the Fortune 500.
- Its gross margin increased to 64%.
- One-hundred percent of customers recommend Snowflake.
After implementing Snowflake’s cloud technology, customers saw average growth of 612% in just three years…
No wonder clients are signing long-term contracts with Snowflake.
And businesses can’t get the same services somewhere else… Snowflake has 121 patents on its cloud technologies.
In less than a decade, this company went from controlling 0% of this market… to becoming one of Amazon’s, Google’s and Microsoft’s No. 1 competitors.
That’s why Truist Financial calls Snowflake “the fastest-growing software company in history.”
And Snowflake isn’t resting on its achievements…
The company is expanding into other fast-growing segments of the cloud software market, such as data science and machine learning.
Driven by new customer additions, growing order sizes and best-in-class product offerings… the company should continue its triple-digit revenue growth when it reports its next quarterly results.
Insiders and “In-the-Know” Investors Love This Stock
I’m ecstatic to see that company insiders and some of the smartest investors on Wall Street are not just buying… but loading up on shares.
I’ve already mentioned that Warren Buffett’s Berkshire Hathaway is an investor.
Prominent venture capital firms Altimeter Capital, Iconiq Capital, Redpoint Ventures, Sequoia Capital and Sutter Hill Ventures also own significant stakes in the company.
Salesforce, the cloud giant, with a $215 billion market cap, bought $250 million in Snowflake stock in a private placement weeks after the IPO.
The investment banks are on board… Morgan Stanley, Coatue Management, Dragoneer Investment Group and others.
The big mutual funds want a piece of the action… Fidelity, T. Rowe Price and Vanguard are all big shareholders.
Most importantly, management and board members are huge stock owners… Collectively, they own billions of dollars’ worth of stock on the open market.
Snowflake CEO Frank Slootman holds around 13.2 million shares. The company’s co-founder and chief technology officer, Benoit Dageville, owns approximately 5.7 million shares.
Talk about eating your own cooking…
This is a great sign for shareholders. Management has a lot to gain if Snowflake’s stock price continues to increase.
With an industry projected to surge to more than $1.3 trillion over the next several years… and Snowflake blazing the trail… a much higher stock price looks like an inevitable result.
***Action to Take***
Buy Snowflake (NYSE: SNOW) at market. And use our customary 25% trailing stop to protect your principal and your profits.
Don’t Let the Stock Price Intimidate You
If I had to pick just one thing that frustrates new investors the most… it would be price.
I get it. When you’ve got just a few hundred or a few thousand dollars to invest, nobody wants to put it all into one company.
And Snowflake’s stock price – currently more than $300 per share – is an intimidating number.
But share price no longer matters…
There’s a “backdoor market” where you can buy pieces of this company for less than $5.
These small pieces of stock are called “fractional shares.” And just as the name implies, you are buying a fraction of a share.
It’s an unusual way to invest… and few people outside Wall Street know about it.
However, most brokerage firms now make fractional share purchases available to clients. Participating brokers include Charles Schwab, Fidelity, Interactive Brokers and Robinhood, among others. I bet your brokerage does too.
As an investor, all you need to do is make a trade using your brokerage’s platform. It’s easy. You can even do it on your phone.
Each brokerage platform boasts slightly different choices or requirements for making a trade. Some brokers require a minimum investment of only $1.
But once you place your trade, your investment is treated just as if you owned a full share or 1,000 shares. If the stock goes up by 10%… your stake goes up by 10%. If the stock goes down… your stake goes down.
That’s great… because now we can focus on buying stocks with the most value… not just the ones with the lowest price tags.