What happened
Shares of Snowflake (SNOW -0.26%) fell 14% in the first six months of 2021, according to data from S&P Global Market Intelligence, which was likely caused by a widening loss reported in the company's fourth quarter. Additionally, investors fled tech stocks at the beginning of 2021, leaving Snowflake's share price reeling.
The cloud-based data platform company saw its shares rebound slightly over the past few weeks, as its share price has gained 6.5% since the beginning of July.
So what
The company's share price first started falling in February on no company-specific news. Instead, investors were likely pushing down Snowflake's shares as part of a broader sell-off in the tech sector.
Image source: Getty Images.
Investors flocked to technology stocks during lockdowns and social distancing, but at the beginning of the year, many technology companies saw their share prices plummet as investors pivoted to other sectors of the U.S. economy. That helped push down Snowflake's stock by about 8% in February.
Then, in March, Snowflake's share price dropped again after the company reported its fourth-quarter and full-year fiscal 2021 results. Revenue skyrocketed 124% for the full year, but investors were likely concerned that the company's losses widened.
Snowflake reported a loss of $539.1 million, compared to a loss of $348.5 million in the prior year. Investors weren't happy with the financial results and pushed the tech stock down nearly 12% in March.
Now what
Even with Snowflake's share price drop this year, the company is still in the early stages of its growth. Snowflake's management said at its recent Investor Day that it's on course to reach $10 billion in annual revenue by fiscal 2029.
Those projections are for pretty far down the road, of course, but Snowflake is growing fast as evidenced by its 73% increase in customers last year. Investors playing the long game with Snowflake may want to remain patient with this company as it continues to build its cloud data storage opportunities.
