CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved.

Snowflake shares: where now for the blockbuster IPO?

Snowflake soared on the first day of trading, but can it keep this amazing growth trajectory going?

Snowflake: where do we go from here?

Now that one of the year’s hottest IPOs is successfully away, what can we expect next from Snowflake?

The firm went from a valuation of $33 billion to $88 billion in around ten minutes of frantic trading. It was a small float, so the big increase was to be expected, but the firm now finds itself well capitalised with cash to fund further expansion.

Learn how to buy, sell and short Snowflake shares

Snowflake still losing money

The firm continues to lose money. It did see a fall in net losses in the first two quarter of this year, but it still continues to lose prodigious amounts, with a loss of $177.2 million in the six months to 31 July 2019. But firms like Snowflake are growth vehicles, and if the firm can keep convincing investors that it is moving in the right direction to become profitable then the stock may continue to do well.

It has significant competitors, most notably the likes of Microsoft and Amazon. This will mean that the company will keep burning cash. For those who had stock in the firm before the IPO, the success of the offering gives them little reason to abandon their holdings entirely.

But for those waiting to buy, there seems little reason to rush in. A good stock will give plenty of opportunities for traders and investors to get in at a better price. At the moment, with little in the way of chart data, it will be hard to gauge when that ‘better price’ will emerge.

The longer-term growth story is attractive, but there is no need to jump in right now. Indeed, with the current market selloff accelerating, Snowflake may find itself under pressure as well.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

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