Snowflake Inc.’s shares skyrocketed on their first day of trading, giving the biggest tech IPO of the year a valuation of roughly $75 billion and feeding the recent bout of enthusiasm around initial public offerings.
Shares of the data-warehousing company recently traded at $269.06, more than double their IPO price of $120 and more than triple what the company initially targeted a week ago for its offering. Just after the stock opened, it traded as high as $319. Wednesday’s ascent means the company is now valued at more than five times the $12.4 billion valuation it notched in a private funding round in February of this year.
“Does this put pressure on us? Of course it does,” Frank Slootman, Snowflake’s chief executive, said about the company’s soaring stock price. “It’s a vote of confidence. But clearly as a management group and as an employee base we have to work very hard to deliver on it.”
Hunger for growth in a low-interest-rate environment and a shift of favor toward technology companies have helped fuel significant demand for IPOs this year, and Snowflake’s first-day performance is likely to add even more hype. Snowflake is one of the most hotly anticipated tech offerings among software and cloud-data investors.
Snowflake’s rise is also emblematic of the broader tech sector’s run-up in 2020. The tech-laden Nasdaq Composite Index is up 24% so far this year, far outdistancing the gains in the S&P 500, even after a recent pullback.
