Buffett's Berkshire Hathaway offloads entire $990M Snowflake stock

Warren Buffett's Berkshire Hathaway has made a significant investment shift by completely divesting its $990 million stake in Snowflake, the cloud data warehousing and analytics firm. The move was disclosed in a recent filing with the U.S. Securities and Exchange Commission (SEC), and although abrupt, it isn’t at all surprising.

The cloud startup which once held a $120 billion post-IPO valuation.has been struggling in recent times. Snowflake’s stock is currently trading at $127, almost half its highest price this year of $235.

The company’s woes started In late February when it reported $774.7 million in revenue for the fourth quarter of 2024. Although the figure translated to 32% year-over-year growth, it fell short of analysts' expectations leading to a 24% drop in the company's shares.

Shortly thereafter, CEO Frank Slootman, who had guided the company through its IPO, stepped down and was replaced by Sridhar Ramaswamy, Snowflake's senior VP of AI and a former Google executive.

The first quarter of Snowflake's 2025 financial year showed some recovery, with revenue increasing to $828.7 million, up by a third from the previous year. However, the company was soon hit by another blow when cybersecurity firm Mandiant reported that cybercriminals had stolen a "significant volume of records" from Snowflake's customer database. The breach affected about 165 companies, including telecom giant AT&T.

Adding to Snowflake's challenges are ongoing concerns about its pricing model. Gartner, a leading research and advisory company, has noted that while Snowflake leads the industry in terms of ease of use, there are growing customer frustrations over the unpredictability of their bills. According to one analyst, some users have turned to financial operations (FinOps) vendors to help manage costs.

Berkshire Hathaway did not provide specific reasons for its decision to divest from Snowflake, but the combination of underwhelming financial performance, leadership changes, and security issues likely played a role. The investment firm also reduced its holdings in Apple stock, signaling a broader reevaluation of its tech investments.

As Snowflake navigates these challenges, the company will need to reassure investors and customers alike that it can maintain its growth trajectory to turn its fortune around.