4. Snowflake Inc. (NYSE:SNOW)
Number of Hedge Fund Holders: 73
Headquartered in Montana, Snowflake Inc. (NYSE:SNOW) is an on-demand data warehousing company providing data storage and analytics services. Andreas Halvorsen’s Viking Global acquired shares of Snowflake Inc. (NYSE:SNOW) in Q3 2020, and by the third quarter of 2021, the hedge fund held 1.4 million shares worth $434.3 million. Viking Global dumped its shares of Snowflake Inc. (NYSE:SNOW) entirely in Q4 2021.
On February 15, Mizuho analyst Gregg Moskowitz lowered his price target on Snowflake Inc. (NYSE:SNOW) to $410 from $450 and kept a ‘Buy’ rating on the shares. Although demand for the software sector remained strong, the reduced price targets on “high-growth software vendors” reflect the rising rate environment, according to the analyst.
Among the hedge funds monitored by Insider Monkey, 73 funds were bullish on Snowflake Inc. (NYSE:SNOW) on September 30, with stakes equaling $14.5 billion, compared to 70 funds in the quarter earlier, holding stakes in Snowflake Inc. (NYSE:SNOW) worth $12.5 billion. Altimeter Capital Management, the leading Snowflake Inc. (NYSE:SNOW) stakeholder, held a $6.3 billion position in the company as of Q3 2021.
Here is what Guardian Capital Management had to say about Snowflake Inc. (NYSE:SNOW) in its Q4 2021 investor letter:
“When we read the quarterly earnings updates, we continue to be impressed by the magnitude of the reallocation of resources within society. For instance, cloud spending is expected to nearly triple by 2025. The migration to the public cloud is a massive opportunity for Snowflake, as well as dozens of companies that are still small private ventures today. The markets for digital commerce, payments, advertising, streaming of content, and information intelligence, are likely to keep compounding at double digit growth rates for the foreseeable future.
No wonder there is much excitement and people feel increasing pressure to participate in wealth creation that is taking place in those fields. While many intelligent capital allocators understand the value that is to be found in investing in internet-enabled businesses, the fear of timing and valuation has been high for years. The shift in thinking and the new mental models required to transition from linearly growing companies to some of the most scalable business models is hard. It becomes even harder when having to do the homework in an echo chamber of worried market observers constantly pointing at rising stock prices combined with the ‘I told you so’ crowd that are flourishing nowadays.
All in all, we are convinced that the podium on which we are focused – the data-driven, cloudnative, founder-led, businesses that enable people to play and work digitally – is where the magic happens for a long time to come. What matters to us is whether the businesses are worth at least double in 2025. We think that when we will be looking back at today’s prices in 2030, they will likely look like bargains for several businesses.”
