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The irony is thick today. It’s Dec. 2 in upstate New York, the kids are home from school raising holy heck in the next room thanks to an on-going snowstorm, and I’m here updating our Growth Portfolio at Inside Edge Capital — an RIA named after my collegiate ski-racing days; yes, snow-skiing. And the focus stock on screen today? Snowflake (SNOW) of course. I’ve had my eye on this name for a while, and SNOW is set to report earnings on Wednesday. What’s particularly interesting is today’s biggest earnings story — MongoDB (MDB) — is trading higher by 25% after crushing earnings expectations. SNOW, MDB and a few others I’ll talk about are all part of the “Internet Services & Infrastructure” sub-industry group. To help better paint this picture, and possibly make you a better investor, we should talk about the 11 sectors that make up the S & P 500 index and how they are sub-divided into a hierarchy to group similar companies together. We use GICS (Global Industry Classification System), which is co-branded intellectual property between MSCI and S & P 500 Dow Jones Indices (a division of S & P Global). For more details about GICS, go here . So the order goes S & P 500 index → 11 Sectors → 25 Industry Groups → 74 Industries → 163 Sub-Industries. As much as we like to think standout stocks with the most powerful technical setups and fundamental patterns go it alone, it’s just not the case. Research from various sources I trust attribute as much as 50% of a particular stock’s movement to the overall movement of its GICS group. So if you’re considering a stock for inclusion in your portfolios, you should look at the other stocks in the group for confirmation that capital is flowing into this group. In the quote sheet below, Snowflake is grouped with the other 12 members of its sub-industry group. “Information Technology’ is the Sector, “IT services” is the industry, and “Internet Services & Infrastructure” is the Sub-Industry Group. This group is not building vertical applications or end-user software. Rather, they enable the underlying infrastructure or services that allow the internet, cloud, hosting and web-based applications to function. Examples are cloud storage / back-end, network services, data hosting, API’s etc. Think of it as the plumbing and scaffolding of the modern cloud / internet ecosystem, which makes it possible for apps, data platforms, SaaS web services to operate reliably and at large scale. For the 13 total names in this group, I sorted them by year-to-date percent change and you’ll certainly see some recognizable standout names with monster returns on the year. How about CoreWeave at the top, still up 95.93% on the year? The stock has gotten hammered, but my fellow technical analysis geeks might recognize an A=C pair of 55% measured moves into $68.50-area support that seems to be holding. I’m interested here. As mentioned above, MongoDB delivered a strong quarter, suggesting companies continue to invest in data infrastructure, cloud computing databases and scalable back-end services. Infrastructure players like this seem to be valued a bit differently compared to others where current earnings are key. Companies like this are valued based on future growth and revenue potential as they invest heavily back into their own infrastructure impacting profitability and margins. It goes to support the cloud growth story and should continue to lift all / most boats in this group. Finally, turning to Snowflake that reports earnings Wednesday. Snowflake is arguably the cloud data warehousing / infrastructure leader. MongoDB’s strong quarter reinforces the border enterprise demand for scalable data infrastructure, which makes me bullish for the earnings report tomorrow. The Street is looking for non-GAAP EPS of $0.31 and GAAP EPS of $(0.96) on revenue of $1.184 billion. As mentioned above, the focus with the Internet Services & Infrastructure stocks is topline growth and as you can see the revenue growth (bottom of chart by red dashed line) has been consistently at 25% and above. Looking at the most recent 13F fillings, two hedge fund managers I watch closely hold SNOW. In Brad Gerstner’s Altimeter Capital, it’s the 4th largest holding. Brad has become the Joe Rogan of sorts with this BG2 podcast, interviewing AI thought-leaders brining the revolution mainstream. Philippe Laffont (who I saw speak at CNBC’s Delivering Alpha ) has a 1.22% allocation. He also holds a 2.55% allocation in CoreWeave . I will be adding our initial allocation of SNOW in our growth portfolio right after I submit this (well past my deadline) to my editors, and then probably head out to play in the snow a bit with the kids. -Todd Gordon, Founder of Inside Edge Capital, LLC We offer active stock alerts, portfolio management, as well as regular market updates like the idea presented above here . DISCLOSURES: Gordon owns SNOW personally and in his wealth management company Inside Edge Capital. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
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