Tech stock Snowflake has had a tough year, and news that Warren Buffett has sold is another blow.
The price of SNOW has rallied from recent lows around $110 to get back above the $122.82 level. The next critical level comes in ahead of $146.50.
Buffett’s conglomerate Berkshire Hathaway has dumped its stake worth almost $1 billion in Snowflake, which it has held since the stock’s Wall Street debut.
The high-profile sale is a blow for Snowflake, troubled by a poorly received CEO change and headlines about a cyberattack.
Snowflake is an enterprise software company specialising in cloud data warehousing. In September 2020, Berkshire Hathaway purchased $250 million of Snowflake stock at its IPO price of $120 and another buy at the debut price. The purchases marked Buffett’s first entry into IPO waters since the 1950s when he bought Ford stocks.
Valued at $44.1 billion, Snowflake traded below its IPO price in August and is down more than 68% from its December 2020 all-time highs.
The company invested heavily in artificial intelligence (AI) to enhance its cloud data storage but is competing with Microsoft and Amazon. Those companies have more extensive resources and a dominant position in the enterprise software and AI markets.
While Snowflake stock has fallen 33% year to date, Microsoft is up 12.6%, and Amazon is up 18.7%.
SNOW stock is still increasing, but investors may step into sell ahead of the impending resistance and news of the Buffett sale.