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Should You Buy Snowflake Stock Now?

By Eric Cuka - Jun 2, 2021 at 8:17PM

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The stock has corrected from highs earlier this year -- now could be the time to get in.

Since its IPO, Snowflake (SNOW 0.48%) stock rallied to $429 before crashing below $200. Its IPO made it a blockbuster unicorn stock for 2020, but is it a buy in 2021?

Snowflake offers a cloud-based data storage and analytics service, generally termed "data warehouse-as-a-service". It allows corporate users to store and analyze data using cloud-based hardware and software. Snowflake is technically not a Software-As-A-Service (SaaS) stock. 93% of its revenue is consumption-based. Snowflake provides a data warehouse-as-a-service or database-as-a-service (DaaS) that claims to dramatically simplify concurrency, performance, and overhead challenges, offering both reduced cost and improved agility.

It doesn't hurt that Snowflake is a Berkshire Hathaway-backed company. It works with Apple, Nike, Mastercard, Datadog, Walgreens, and many others. It has 75+ large, strategic accounts working toward migration and has been adding Fortune 500 customers at a rapid clip.

Can Snowflake stock help boost your stock market portfolio gains?

Eric Cuka owns shares of Apple, Datadog, Mastercard, Nike, and Snowflake Inc. The Motley Fool owns shares of and recommends Apple, Berkshire Hathaway (B shares), Datadog, Mastercard, Nike, and Snowflake Inc. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short June 2021 $240 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Snowflake Inc. Stock Quote
Snowflake Inc.
SNOW
$168.68 (0.48%) $0.80
Berkshire Hathaway Inc. Stock Quote
Berkshire Hathaway Inc.
BRK.A
$452,697.25 (1.66%) $7,395.26
Berkshire Hathaway Inc. Stock Quote
Berkshire Hathaway Inc.
BRK.B
$301.55 (1.71%) $5.08
Apple Inc. Stock Quote
Apple Inc.
AAPL
$172.10 (2.14%) $3.61
Walgreens Boots Alliance, Inc. Stock Quote
Walgreens Boots Alliance, Inc.
WBA
$40.59 (1.30%) $0.52
Mastercard Incorporated Stock Quote
Mastercard Incorporated
MA
$354.27 (1.05%) $3.69
NIKE, Inc. Stock Quote
NIKE, Inc.
NKE
$116.07 (1.73%) $1.97
Datadog, Inc. Stock Quote
Datadog, Inc.
DDOG
$115.72 (0.82%) $0.94

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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