Snowflake(SNOW) The Motley Fool·2025-03-09 08:29Core Insights - Warren Buffett's investment strategy focuses on companies with steady growth, reliable profits, and strong management, avoiding trends like AI [2][15] - Berkshire Hathaway sold its entire position in Snowflake after a period of underperformance, despite the stock's subsequent rise [3][12][14] Company Overview - Snowflake is a cloud computing company that enables organizations to aggregate and analyze data effectively [3] - The company launched the Cortex AI platform in late 2023, allowing businesses to utilize large language models for custom AI software [4] Financial Performance - Snowflake generated 3.8 billion, leading to a net loss of $1.3 billion, a 53.7% increase from the previous year [8][9] Market Position and Valuation - Snowflake's remaining performance obligations (RPOs) rose by 32.6% year-over-year, indicating strong future demand, but only 48% is expected to convert to revenue in the next year [10] - The stock trades at a price-to-sales ratio of 16.2, making it more expensive than competitors like Microsoft, Alphabet, and Amazon [14] Investment Perspective - Berkshire's return on Snowflake was around 12.5% over four years, underperforming its historical average of 19.9% [13] - Given the current valuation and growth challenges, it is suggested that investors remain cautious regarding Snowflake stock [17]