Airbnb (ABNB) and Snowflake (SNOW) were among the most celebrated IPOs of the past five years. Launched with great fanfare and sky-high valuations, both companies were positioned as transformative forces in their respective industries: Airbnb as the disruptor of traditional hospitality and Snowflake as the next-generation data warehousing cloud platform. Yet, nearly five years since their debut, the performance of their stocks tells a different story—one that challenges the traditional narrative of tech IPO triumph. Both stocks are either down or flat since their initial offerings, even as revenue has grown and operations expanded. The question is no longer whether they are innovative, but whether the market still believes in their long-term value.

Quantitative Snapshot: Five Years, Flat Returns, and Investor Frustration

According to the chart above, Snowflake is currently trading at $223.50, representing a negative return of -11.98% since its IPO in September 2020. Airbnb, which went public in December 2020, stands at $132.41, up only 8.5% from its offering price. For long-term investors, this translates into nearly five years of “dead money”—a term used on Wall Street to describe stocks that neither rise significantly nor pay dividends, essentially tying up capital without delivering returns.

For context, during the same period, the S&P 500 surged over 60%, driven by the likes of Nvidia, Microsoft, Apple, and Meta. This means that both ABNB and SNOW have underperformed the market by a wide margin. Adjusting for inflation and opportunity cost, the real return on these stocks is even worse.

Airbnb: A Profitable Giant with Valuation Overhang

Airbnb entered public markets with enormous expectations. The company’s innovative model of peer-to-peer lodging had not only reshaped global travel but also stood out during the pandemic as a more resilient hospitality model. The market responded accordingly, sending the stock to a near $100 billion valuation on day one.

Since then, Airbnb has delivered strong operating performance. The company became profitable on a GAAP basis, expanded into new markets, and invested in products beyond lodging, such as “Experiences” and payment tools. However, its stock has failed to rise accordingly. One key reason is valuation. At its IPO, Airbnb traded at astronomical multiples, leaving little room for multiple expansion—even if earnings improved. Additionally, regulatory pressures in major cities like New York, Barcelona, and Paris have put limits on short-term rentals, creating uncertainty around future growth.

Snowflake: Data Powerhouse with Elusive Profitability

Snowflake captured investors’ imaginations with its revolutionary cloud-based architecture for data storage and analytics. Its unique model allowed companies to share data seamlessly across platforms and vendors, promising a new era of enterprise intelligence. Backed by Berkshire Hathaway and Salesforce at IPO, SNOW was seen as the crown jewel of SaaS at the time.

However, despite triple-digit revenue growth in early years, Snowflake has yet to achieve consistent profitability. Its net losses have narrowed, but the bottom line remains negative. Meanwhile, competition in cloud services has intensified, with Microsoft Azure, Amazon Redshift, and Databricks capturing significant mindshare and enterprise contracts.

The company has responded by pivoting toward AI-driven data solutions, forging partnerships and expanding use cases, but profitability remains elusive. In a market that now prioritizes cash flow and earnings—even for tech firms—this is a critical handicap.

Relative Performance: A Stark Contrast to Tech Leaders

Comparing ABNB and SNOW to mega-cap tech peers is sobering. Microsoft’s EPS has grown over 130% in the last five years. Nvidia and Meta have seen even more explosive gains. These companies have also delivered on the profitability front, with improving margins, dividends, and buybacks.

In contrast, Airbnb and Snowflake are stuck in a valuation purgatory. They are too large and mature to be considered high-risk growth plays, but not yet stable or rewarding enough to be considered value stocks. This leaves them in a strategic gray zone—traded on promise but judged on performance.

Moreover, investor appetite has shifted post-2022. The AI boom and rising interest rates have pushed capital toward companies with high returns on invested capital (ROIC), free cash flow, and earnings visibility. Unfortunately for ABNB and SNOW, these are not yet their strong suits.

Strategic Assessment: Market Disillusion or Rational Reset?

There are two competing views among analysts and investors regarding the trajectory of these companies. One camp argues that the market was overly optimistic at IPO, and current pricing reflects a healthy reset to realistic expectations. The other believes that the market is being overly punitive, failing to price in future growth potential.

For Airbnb, the bullish case rests on global brand strength, the expansion into new verticals, and a proven capacity to generate profits. The bearish case highlights regulatory risk, slowing growth in mature markets, and the challenge of scaling beyond accommodation.

Snowflake’s bulls argue that data will remain the new oil, and its early dominance gives it a strategic moat—especially as AI and machine learning require robust data platforms. Bears point to the lack of net income, growing competition, and the risk that its niche may be swallowed by larger platforms offering bundled services.

What Needs to Change?

To regain investor confidence, both companies must address their core weaknesses. For SNOW, that means moving toward profitability and clearly communicating a path to sustainable margins. Share buybacks or a profitability timeline would go a long way.

Airbnb must demonstrate that its next growth leg—whether through payments, business travel, or international expansion—can drive top-line growth without eroding margins. Additionally, regulatory clarity or successful lobbying in key cities could be a tailwind.

A key catalyst could also come from capital return strategies: dividend announcements, buybacks, or high-profile acquisitions that reignite interest in the stocks.

Broader Implications: IPO Lessons and Investor Expectations

The disappointing post-IPO performance of Airbnb and Snowflake also serves as a cautionary tale for future IPOs. The market today is no longer willing to reward “growth at all costs” and expects clear visibility into earnings and margins.

This shift in investor psychology is important. In a world of higher interest rates and tightening liquidity, companies must now offer more than just vision—they must deliver profits. The days of unlimited VC cash and loss-leader models are over. ABNB and SNOW are now being measured by Wall Street’s classic metrics: earnings per share, return on equity, and free cash flow.

Conclusion: Future Still Possible, but Not Guaranteed

While Airbnb and Snowflake remain fundamentally strong companies, their stock performance has not mirrored their operational progress. Investors are now demanding more—more profits, more transparency, and more discipline.

Whether these companies can deliver on those fronts will determine if they remain stuck as “dead money” or re-emerge as market leaders. Until then, their stocks will likely remain battlegrounds between vision-driven optimists and value-focused skeptics.