Why Are Investment Funds Run by Warren Buffett and Brad Gerstner Dumping This Artificial Intelligence (AI) Stock?

Tech stock Nvidia saw its price surge 151% so far in 2024. Meanwhile, tech stock Snowflake (NYSE: SNOW) is trading down 40% over the same period. As it turns out, having strong connections to the artificial intelligence (AI) sector isn't enough on its own to create value. Investors also expect to see solid financial results.Snowflake is a provider of cloud computing software solutions, and it was generating lightning-fast revenue growth when its stock first came public in 2020. That growth has since slowed, while the company continues to spend heavily developing new AI products and services at the same time. That increased spending is driving blowout losses at the bottom line. It's also got institutional investors rethinking their investment theses on Snowflake.Warren Buffett's Berkshire Hathaway holding company bought Snowflake stock ahead of its initial public offering in 2020. While the price it paid wasn't made public, Berkshire likely paid around $120 per share. It rode the stock to its all-time high of $392 in late 2021, but it continued to hold on the way back down. Berkshire eventually sold its entire stake in Snowflake during the second quarter of 2024, when it was trading at around $135 per share.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool