As a cub reporter, back in 1990, I covered that conversation over Cisco Systems. Companies had PCs for all their workers, but did they really need to connect them in networks? Turns out, yes. The next decade, Google came along promising its revenue would rise as fast as Internet growth. Indeed. And Facebook’s challenge when it went public in 2012 was whether it would be wiped out by smartphones. Ha ha.

That’s not to say that every giant reaches its projected height. Whether it’s Groupon or AT&T Wireless or the dreaded eToys, sometimes the hype isn’t justified.

Today, the company in the crosshairs is Snowflake, the inventor of the cloud database. I’ve raved about Snowflake before, which also impressed—and drew investment dollars—from Warren Buffett and Marc Benioff alongside its IPO. The company has a compelling Silicon Valley origin story, and revolutionizing the use of databases seems like pretty heady stuff. But Snowflake also has much competition from Amazon, Google, and others. And its stock market value is nearing $100 billion while it’s still losing a lot of money every quarter.

This week was Snowflake’s first quarterly report since going public. Customers, who pay by the second to analyze their data stored with Snowflake, pushed sales up 119% to $160 million. For a company still in growth mode, that generated a net loss of $1.01 per share. Both numbers were a little better than the average analyst forecast, but as we saw with Zoom and Peloton and other tech stocks, that wasn’t enough to impress the first wave of rapid traders, human and algorithmic. Snowflake’s shares initially traded down 6%.

Then investors (and reporters) delved into the details. New customers who sign up with Snowflake buy credits, almost like Amazon gift cards, that they can spend later when they actually start to use the service. Snowflake reports those credits not as revenue but in a separate category called “remaining performance obligations.” And those RPOs jumped 240% to almost $1 billion. Well-compensated CEO Frank Slootman also revealed to analysts that Snowflake had recently gotten better terms from Amazon and Microsoft for the massive amounts of cloud computing services it buys from them.

“We get really big discounts,” Slootman told me in a Zoom call from his home office on Thursday. “It’s a function of contract scale. It’s not because we’re so good-looking or anything else,” he joked. Instead of being hurt by its relationships with the big cloud providers, as some feared before the IPO, Snowflake is prospering.

On Thursday morning, the stock rallied and hit an all-time high, closing at $339.89, a 16% gain and almost triple its IPO price of $120 on September 16.

Why the run-up? In addition to its RPOs, Snowflake is expanding into new areas for analysis such as unstructured data. Those are the vast collections of images or PDF files or other items that companies have accumulated without much organization or metadata. “Our world is getting overrun with unstructured data in terms of video and audio and PDFs,” Slootman says. “It’s not easy. We have to reinvent things…but this is what we fight to do, we love it.”

Shareholders are hoping they keep on fighting, that’s for sure.

Aaron Pressman
@ampressman
aaron.pressman@fortune.com

***

On the latest episode of Brainstorm podcast, we discuss how Elon Musk is transforming one industry after another—and why he’s Fortune’s Businessperson of the Year. Brainstorm’s Brian O’Keefe and Michal Lev-Ram speak with Fortune‘s Andrew Nusca about what drives Musk. They also chat with GM’s Ken Morris, VP of Electric and Autonomous Vehicles. While Musk’s Tesla may have lit the fire under the electric vehicle market, the scale of GM means it could put many more drivers into environmentally-friendly cars. Listen to the episode here. 

NEWSWORTHY

Ever have that feeling where you're not sure if you're awake or dreaming? The destruction of the movie theater business during the pandemic may continue into 2021. AT&T's Warner Brothers studio announced that it will bring its entire slate of movies next year, including the fourth Matrix movie, comic book blockbuster The Suicide Squad, and Lin-Manuel Miranda's musical In the Heights, to streaming service HBO Max on the same day they hit theaters.

Two steps back. Timnit Gebru, technical co-lead of Google's A.I. ethics team, left the company on Thursday, saying she had been fired. Gebru said she was pushed out after writing an email to “women and allies” criticizing the company’s lack of commitment to diversity. Google didn't comment to Fortune but pointed to an email by Jeff Dean, its senior VP for research, who called Gebru's departure a "difficult moment."

Qubit grand prix. Hopefully, Robert can sort out the quantum computing race more clearly here next week (his big feature is out this week), but Chinese scientists are claiming to have pulled into the lead. Their new machine solved a particularly knotty computation problem in chemistry almost 100 trillion faster than current top supercomputers. That's billions of times faster than even Google's claims of quantum supremacy from last year. Robert, is it for reals?

Visagate. The outgoing Trump administration may or may not join an expected antitrust lawsuit against Facebook from state attorneys general, but the feds have other issues with the company. On Thursday, the Justice Department sued Facebook for violating immigration laws by hiring 2,600 foreigners on H1-B visas to fill jobs that had qualified U.S. candidates. The department has also started an investigation of Facebook's virtual reality business, Oculus, Bloomberg reports.

The tracks of my coins. As digital currencies like bitcoin move ever deeper into the mainstream financial system, they're drawing the attention of leading players. Top stock index creator S&P Dow Jones Indices said Thursday it will launch cryptocurrency indexes (as we spell that plural noun here in the USA) starting next year. In the Pressman household, we are dabbling in a tiny bit of crypto coinage thanks to PayPal's new features. More on that at a later date.

FOOD FOR THOUGHT

Over the past year or so, some of the most prominent women founders of startups have been pushed out, including Audrey Gelman at The Wing and Steph Korey of Away. Fortune senior writer Maria Aspan has a deep dive into the conditions for women founders and the significance of the recent wave of departures.

These trends, married with the cascade of high-profile founder ousters, are fueling a growing debate among startup industry insiders over whether female founders are facing a backlash—one that makes them more subject to public scrutiny and, ultimately, more likely to be forced out of their companies than their male counterparts.

“There’s absolutely a double standard for women,” says Alex West Steinman, the cofounder and CEO of the Coven, a ­Minneapolis-based women’s coworking startup. “We do walk around with a target on our backs, and people are looking for us to fail.” There’s copious social science research—and widespread real-world experience—that agrees. Women in the business world face what’s been dubbed the “double bind,” which penalizes them for “unfeminine” behaviors that are expected and often applauded in male leaders. 

FOR YOUR WEEKEND READING PLEASURE

A few great long reads I came across this week:

A Day in the Life of an Amazon Warehouse Worker (Wall Street Journal)
Before Covid, she was an accountant. Now she works 11-hour shifts sorting Lysol wipes and Christmas decorations; ‘it has been more exhausting than ever’

Why I’m Mourning the Arecibo Telescope (Slate)
In its 57 years, the massive radio telescope made some groundbreaking discoveries, but it also connected our hearts and minds to the cosmos.

Coding the future: the tech kids solving life’s problems (The Guardian)
They’re too young to vote or drive. But meet the children writing computer programs to track our health and wellbeing, choose a new school… and even how to cheat at online games.

If You Pay a Mouse To Eat a Cookie, Will He Like It More or Less? (MIT Press Reader)
Researchers Constança Esteves-Sorenson and Robert Broce reviewed more than 100 tests — and ran one of their own — to find out if pay harms performance on enjoyable tasks. Here’s what they learned.

IN CASE YOU MISSED IT

Airbnb debuts new rules to prevent New Year’s Eve partying By Danielle Abril

How Chinese phonemaker Xiaomi conquered India—and outperformed Apple By Eamon Barrett and Grady McGregor

Robinhood’s next adventure: Stealing market share from the rich By Jeff John Roberts

Little Big Shorts: How tiny ‘activist’ firms became sheriffs in the stock market’s Wild West By Bernhard Warner

On cloud nine: Why these cloud security stocks are soaring By Anne Sraders

Congress should legalize cannabis now—for the economy and for social justice By David Culver

(Some of these stories require a subscription to access. Thank you for supporting our journalism.)

BEFORE YOU GO

We learned two weeks ago that the famed Arecibo radio telescope in Puerto Rico was damaged beyond repair. Now the scientifically significant and Hollywood-starring structure has collapsed. The National Science Foundation posted a video of the Arecibo's demise (including some drone footage) that's both awe-inspiring and depressing at the same time. Hopefully, your weekend's events will be more of the former than the later. See you back here on Monday.