Is Snowflake (SNOW) the Hottest Large-Cap Stock So Far in 2025?

We recently published a list of 10 Hottest Large-Cap Stocks So Far in 2025. In this article, we are going to take a look at where Snowflake Inc. (NYSE:SNOW) stands against other hottest large-cap stocks so far in 2025.

The stock market as a whole hasn’t had a great start to the year, but there have been some outliers. Focusing on these outliers might pay off in the long run and the statistics behind it — especially this month — are very important. The S&P 500’s calendar year performance has matched the direction of January returns approximately 77% of the time. This means when January shows positive returns, the market finishes higher in 84% of these years with an average annual return of 15.5% for the whole year.

Even if January is negative, the market ends higher some 63% of the time, but with a return of around 2.2%. I’m bringing this up because I believe this correlation can also extend to certain stocks. We’ve seen many mega-cap tech stocks perform well last year after a solid January. A lot of big-cap stocks between $50 billion to $100 billion also performed well.

Accordingly, the methodology for this article involves me screening the top 10 stocks traded in U.S. markets with a market capitalization between $50 billion to $100 billion and then sorted by year-to-date performance.

Is Snowflake Inc (SNOW) the Hottest Large-Cap Stock So Far in 2025?

A software engineer at work, surrounded by a wall of computer monitors connected to a ‘Data Cloud’ platform.

Snowflake Inc. (NYSE:SNOW)

  • YTD Performance: 3.75%

Not the most impressive performance so far, but if you zoom out, the recent recovery is definitely worth discussing. Snowflake Inc. (NYSE:SNOW) is up by 50% since September 2024. This recovery began a month after Warren Buffett gave up on the stock, though I wouldn’t be too excited about it right now.

Q3 net margin fell by almost 18% to -34.4%. Now, it is expected to be profitable for the full year and analysts expect it to recover its margins starting next year, but I believe the current price is more than generous. You’re paying 233 times forward earnings at the current price, and even if you look at next year’s estimated earnings, you’re still paying 164 times forward earnings.

As such, I don’t think that Snowflake (NYSE:SNOW) will end the year with stellar numbers, barring any positive catalysts where the company starts beating expectations by double-digit margins.

Overall, SNOW ranks 10th on our list of hottest large-cap stocks so far in 2025. While we acknowledge the potential of SNOW as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SNOW but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.