At any rate, optimism creeps back into the stock market. After months of downward pressure, the Nasdaq Composite the index tries to find the bottom. And while this move may be temporary and selling pressure may return, investors should ask themselves which former highfliers are willing to return once overall market sentiment improves.
In my opinion, Snowflake (NIYEBE -2.23%) is a name to be guarded. Let’s take a closer look at why.
Cloud revenue is rising
In other words, the cloud market is on fire. For years, businesses have been moving towards the cloud, where data, applications, and security can be centralized and maintained more efficiently at lower costs.
Statistician Chart.
As this transition intensifies, overall cloud revenue increases. In 2017, cloud spending reached $ 145 billion. Next year, it is estimated to increase to nearly $ 600 billion – more than four times that increase.
What Snowflake does
Companies like Salesforce, Working dayat Service Today has carved out niches within the cloud marketplace, focusing on sales, human resources, and IT operations management. However, Snowflake’s business model sets it apart. Instead of focusing on a specific business need, Snowflake aims to increase the productivity of its customers. To this end, it aggregates data, builds models, and predicts results.
Once you understand the business model, you can argue that Snowflake’s competitors are not just other cloud-computing companies but traditional consulting businesses as well. But instead of taking months to conduct interviews or review surveys, Snowflake strives to provide real-time data and insights that give its customers one step ahead of their competition.
Part of the snowflake in the cloud market
With revenue increasing 85% annually in its recent quarter, Snowflake is finding demand for its services. But how much of the $ 600 billion cloud-computing market does Snowflake expect to capture?
Statistician Chart.
As you can see, Snowflake is at the forefront behind many of the giant players in the cloud-computing industry. However, given the company’s high growth rate, it is unreasonable to think that it will achieve its $ 10 billion revenue goal by 2029. Furthermore, if Snowflake continues to gain momentum (analysts estimate 295% revenue growth annually for the next five years), some competitors can be potential consumers – seeks to buy a budding rival with a market cap reduced by half this year.
Even if the summer is in full swing, smart investors should stay NIYEBE in their minds.