Warren Buffett’s Berkshire Hathaway Approaches 200% Gain on Snowflake in Less than 3 Months

• Warren Buffett’s Berkshire Hathaway invested $ 735 million in Snowflake when the cloud data platform went public in September.
• The famous investor company bought about 6.1 million shares which nearly tripled in value to $ 2.1 billion on Monday, an unrealized gain of about $ 1.4 billion.
• Many Berkshire investors have been surprised by Snowflake’s investment, as Buffett has avoided unprofitable tech companies and IPOs for most of his career.
• However, one of Buffett’s two portfolio managers and Berkshire-owned Geico CEO Todd Combs made the bet after experimenting with Snowflake’s offerings as a client.
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Warren Buffett raised a few eyebrows when his conglomerate Berkshire Hathaway invested $ 735 million in Snowflake when it went public in mid-September. The unusual bet is paying off so far: Berkshire’s 2.2% stake in the data warehousing specialist has nearly tripled in value north of $ 2 billion in less than three months.

The billionaire investor’s company shelled out $ 250 million for about 2.1 million shares in a private placement immediately after Snowflake’s IPO. He spent an additional $ 485 million to buy 4 million shares at the IPO price of $ 120 from former Snowflake CEO Robert Muglia in a side transaction.

Read more: Warren Buffett’s expert John Longo explains why Berkshire Hathaway invested billions in pharmaceutical stocks, exited Costco and accelerated share buybacks in the last quarter

Berkshire’s third quarter portfolio update confirmed it held just over 6.1 million Snowflake shares worth $ 1.5 billion at the end of September. Snowflake’s share price climbed to $ 342 on Monday, bringing the value of Berkshire’s stake in the company to around $ 2.1 billion – a gain of around $ 1.4 billion on the paper.

Many Buffett followers have been surprised to see Berkshire betting on Snowflake, given that the investor noticeably prefers proven, profitable and undervalued companies in industries he understands. In contrast, Snowflake is a loss-making technology company with a high valuation and a limited history.

However, Buffett didn’t reinvent himself at 90. Todd Combs, one of Buffett’s deputies and CEO of Geico, owned by Berkshire, made the deal after getting to know Snowflake as a customer.

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Berkshire’s Snowflake investment was one of many notable moves in the past quarter. Buffett’s company also left its Costco position after more than 20 years, gutted its stake in JPMorgan, repurchased a record $ 9 billion in stock and spent more than $ 5 billion on pharmaceutical stocks.