Michael Wiggins De Oliveira
Deep Value Returns, Equity Investing without Options or Leverage
Snowflake remains headed to $390 a share by end-2027 because investors have yet to fully realize it benefits from AI rather than being disrupted by it. It guides for 31% growth and roughly $1.5B of free cash flow, moving toward $2B a year. Buying before the market latches onto that narrative captures the easy money, while waiting for market clues means trailing the market. x.comÂ
Snowflake is headed to $390 a share by the end of 2027 because it is monetizing AI rather than being disrupted by it. It raised its full-year outlook by 4% after only one quarter, is growing revenue above 30%, and is on a path to roughly $2 billion of annual free cash flow within 18 months. Volatility and pullbacks are likely, but the target holds as long as growth stays above 30% and free cash flow rises meaningfully. x.comÂ
Snowflake is overlooked AI infrastructure because every enterprise AI model needs clean, governed data to run on. It has 126% net revenue retention, $9.77 billion of contracted future revenue and 813 of the world's 2,000 largest companies as customers. x.comÂ
Snowflake is showing real AI-driven sales acceleration, and analysts questioning its buybacks and 2028 earnings guide misread it. Net revenue retention is 126%, @WisemanCap notes AI workloads carry higher gross margins than traditional ones, and management sees a $460B TAM by 2031. SBC fell from 50% of revenue to 29% last quarter and could be about 20% in a year; at under $90B EV it trades at 9-10x next year's revenue. Not cheap, but top line and margins drive free cash flow. x.com x.com x.com … Show more
Snowflake's valuation looks full after more than doubling since May on an AI inflection story, given five years of promised inflections that didn't materialize. Stock-based compensation remains heavy at $1.6B against FY2026 revenue of $4.7B, though dilution has been kept in check lately. At about 23x EV/revenue, or 19x forward, it sits near the top of its 2-3 year range. A Databricks IPO could make investors see Snowflake as old relic tech. x.com x.comÂ
Snowflake's revenue growth has far outpaced its stock return, leaving a valuation disconnect. Revenue rose 363% over five years to $1.55 billion quarterly while the shares gained just 19%; that disparity looks hard to justify. x.comÂ
Snowflake is the AI data cloud that enterprises use as a secure, governed foundation to run AI agents and generative AI at scale on their existing data. It has strong ties to OpenAI, through a $200 million multi-year deal, plus Microsoft, Anthropic, AWS, Google Cloud, Accenture, SAP and Palantir. The chart shows a pivot flip ahead of earnings on May 27. x.comÂ
Snowflake now looks really expensive against a $180-200 valuation, even though the business remains strong. It is growing around 30% and pushing hard into AI with its cloud data solutions, which could drive strong growth for years. x.comÂ
Snowflake's blowout quarter shows enterprise consumption accelerating structurally, putting it back atop cloud infrastructure. Product revenue rose 36.5% to $1.49 billion, 5.1% above guidance, clearing the 36% bar and showing first-quarter acceleration was no one-off. Non-GAAP operating margin hit 15.5% versus 12.5% guided and adjusted EPS was $0.62 versus $0.45, so Cortex Code and AI workloads are scaling at high margins. The bull case needs product revenue growth near 40% by Q4. x.com x.comÂ
Snowflake combines accelerating growth with margin expansion, which justifies a valuation that is not cheap. EPS beat as total revenue rose 35% and product revenue rose 37%, a third straight quarter of acceleration. Remaining performance obligations grew 30%, net revenue retention was 126%, and guidance rose for product revenue, gross margin and operating margin. x.comÂ
Snowflake's valuation is even more detached now than in 2021: estimates are lower, the risk-free rate is higher, and the stock price is the same. Even with 33% growth implying $11-12B of revenue a year out, a $130B value against about $200M of profit makes little sense; $20B of profit far in the future is worth about $2B today. With the 10-year at 4.8%, earnings ten years out are worth only 62% of their value under zero rates. Per 2021 forecasts it should have had over $20B in revenue this year. … Show more
AI is becoming a cash-generation tailwind for SaaS companies, as Snowflake shows. Falling token prices let them add AI for minimal or controlled spending, producing packaged services with controlled margins and rising revenue, a recipe for more cash and shareholder returns, which is what the market now rewards. Hardware names like TSMC and NVIDIA already fit that profile, while Alphabet, Microsoft and Meta are slowing cash generation and planning to raise share counts. x.comÂ
