Watching for a Cloudburst

Cloud computing stock values and IPOs are soaring in the Covid-era economy

- Sarah Ponczek, with Claire Ballentine and Vildana Hajric

This year will be remembered as a terrible time for the economy, with a few exceptions. Cloud computing is one.

The blockbuster $3.4 billion stock market debut of Snowflake Inc. stands out as a prime example of the industry’s success despite a bleak economy. The cloud-data company more than doubled its share price in its first day of trading, on Sept. 16. The same day, another cloud computing company, JFrog Ltd., raised more than $500 million in its initial public offering. A global exchange-traded fund of cloud computing stocks has risen 11 times more than the broader stock market this year.

All the hype has observers making comparisons to the dot-com days, when investors pushed the share prices of profitless internet companies into the stratosphere, only to watch it end horribly. This time there’s also a reasonable-sounding rationale for the exuberance: Today’s global pandemic has increased the importance of cloud companies in a work-from-home world.