Snowflake IPO Stands to Yield Huge Market Cap ‘On Day One’

The year of COVID-19 has proven that cloud technology can save the day, enabling work from anywhere – and creating a lot of extra data to manage in the process. The upcoming Snowflake IPO intends to capitalize on that reality.

The data warehousing vendor soon will go public in what analysts expect will be a big, big deal. In the first part of this cloud news roundup, we explore what market experts are saying about the Snowflake IPO.

Then, get the latest on Oracle’s legal fight for a shot at the Joint Enterprise Defense Infrastructure (JEDI) contract. Needless to say, the cloud vendor may be at an end with its attempts to get a piece of the $10 billion project. And finally, global consultancy Infosys has unveiled its cloud platform for digital transformation.

Snowflake IPO Has ‘Potential for Significant Upside’

The upcoming Snowflake IPO could mean a market cap of $35 billion on the first day of trading.

That’s according to an MKM analyst via SeekingAlpha. Rohit Kulkarni predicts that Snowflake, because of its cloud-based data warehousing specialty, could blow away Wall Street. Kulkarni projects a Snowflake IPO valuation between $20 billion and $21 billion. He cites “potential for significant upside, given Snowflake’s rare-air growth rate, secular tailwinds and emerging use cases.”

Snowflake could see that vaunted $35 billion market cap “on day one” if investors apply a combination of “premium multiples,” Kulkarni said.

Last month, Snowflake filed its intent to go public. It hopes to raise $100 million. Donovan Jones, a SeekingAlpha analyst, appears to see that threshold as no issue.

“As enterprises transition to the cloud, complexity has increased markedly, putting pressure on IT groups and providing an opening for companies like ‘SNOW’ to provide a suite of capabilities that both simplifies and removes data siloing limitations,” Jones wrote in a Sept. 3 blog.

Analysts over at The Motley Fool agree. Snowflake, said Brian Feroldi on a Sept. 1 podcast, is “going to be the second-fastest growing SaaS company ever to IPO.”

Plus, he added, “it’s the No. 3 fastest public SaaS company to reach [$500 million]in annualized revenue. Those are impressive metrics.”

The Snowflake IPO is based on a reported $264.7 million in revenue and $348.5 million in net losses as of the company’s fiscal year that ended Jan. 31. Snowflake holds $886 million in cash and boasts 3,000 customers, double the number from a year ago, The Motley Fool noted.

Snowflake has not yet announced its IPO pricing date. The cloud data warehousing provider last year started ramping up its channel program. By all accounts, partners will remain integral to Snowflake’s growth plans.

Appeals Court Shoots Down Oracle’s JEDI Arguments

A U.S. appeals court has put the full kibosh on Oracle’s efforts to get a piece of the $10 billion Joint Enterprise Defense Infrastructure contract.

The cloud vendor has argued since last year that it was wrongfully excluded from consideration for the project. It has insisted that the Department of Defense violated government rules by intending to award JEDI to just one contractor. Oracle also said the procurement process was flawed by …