Burke Wealth Management: Snowflake ($SNOW) Investment Case
Introduction In their recent investor letter, Burke Wealth Management discusses their decision to reinvest in Snowflake, describing it as “Chapter two of the Prodigal Son Returns.” The firm had previously sold their stake following CEO Frank Slootman’s retirement announcement and disappointing 2024 guidance in Q4 2023. The letter explains their careful approach to reassessing the company under new leadership, highlighting the specific improvements that prompted their return to the position and reaffirming their thesis about Snowflake’s role in the expanding AI ecosystem.
Investment Highlight: Snowflake (SNOW)
Investment History
- Initial purchase in summer 2023 as an early position
- Sold following Q4 2023 earnings announcement
- Recent repurchase following Q3 2024 results
Reasons for Previous Exit
- Retirement of “legendary CEO” Frank Slootman
- 2024 guidance that came in “significantly below expectations”
- Uncertainty regarding new leadership direction
Catalyst for Re-entry
- Stabilization and improvement in core business consumption trends
- Introduction of several “exciting new product offerings around AI”
- Growing confidence in new CEO Sridhar Ramaswamy’s innovation strategy
Investment Thesis
- AI Infrastructure Play:
- Companies implementing AI solutions need accessible and secure data
- This fundamental requirement will drive demand for Snowflake’s platform
- Positioned as essential infrastructure for enterprise AI adoption
- Market Opportunity Assessment:
- Acknowledges that AI adoption path is “not always straight” but “winding”
- Remains “confident in the ultimate destination” despite near-term volatility
- Views current trajectory as aligned with long-term thesis
- Strategic Position:
- Expects Snowflake to be a “big player” in enterprise data accessibility
- Values platform’s ability to deliver AI solutions securely
- Sees company benefiting from “hundreds of billions of dollars being invested in artificial intelligence”
Burke Wealth Management views Snowflake as strategically positioned at the intersection of data management and AI implementation. Their renewed investment reflects confidence that after a period of transition, the company is now showing tangible signs of progress in both its core business and new AI-focused initiatives. The firm maintains their original thesis that Snowflake will play a crucial role in helping enterprises leverage their data assets in the emerging “agentic age” of AI, driving productivity enhancements and business insights.
