How to Buy Databricks Stock

Even if Databricks is a private company, there are still ways for you to invest in it. Read on to find out how you can buy Databricks stock.

Databricks has made a name for itself in the tech industry. It allows its users to build, deploy, share, and maintain advanced data science projects. This includes artificial intelligence (AI) and machine learning (ML).

It has a growing customer base and revenue, showing great potential for investors.

Though it remains a private company, you can get in on the ground floor in a few ways. You have investment options like indirect investing and pre-IPO.

Additionally, there are a couple of alternatives you can consider that'll allow you to get your foot in the industry. Read on to find out more.

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Can you buy Databricks Stock?

Right now, purchasing Databricks stock on exchanges like the New York Stock Exchange (NYSE) or NASDAQ is impossible. This is because it's a private company.

However, you can explore other investment options. You can try investing in the company's partners or buying pre-IPO shares.

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How to Indirectly Invest in Databricks

There are three main methods of indirectly investing in Databricks: mutual funds/ETFs, employee stock options, or a publicly traded partner.

Invest in funds holding Databricks
If you want to invest in Databricks indirectly, you could check out exchange-traded funds (ETFs) and mutual funds that include Databricks in their portfolio.

For example, the Fidelity Select Technology Portfolio is a fund that invests in technology and holds Databricks stock in its portfolio (as of March 2024).

Funding an employee stock option
To fund an employee stock option, you can visit a platform like Equitybee. This gives accredited investors early-stage access to private companies.

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1. Sign up with EquityZen
2. Search for Databricks
3. Invest via a fund that owns shares of Databricks

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• Invest in pre-IPO companies through an EquityZen fund.
• $10,000 minimum investment
• Available to accredited investors only

Click Here to Learn More

Investing in a Databricks publicly-traded partner
Another route you could go is to invest in a publicly traded partner of Databricks. For better cloud performance, companies like Microsoft and Google run Databricks on their products.^[2]

Microsoft and Google stocks are publicly traded, so you can buy them using any brokerage or trading app. No special qualifications are needed.

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Indirect investment is just one way of exploring Databricks's success. You can also look at how pre-IPO investing works.

Buying Databricks Stock Before the IPO Date

Unfortunately, Databricks has not announced any plans to go public yet. There also isn't any news of when they'll have their IPO. However, their pre-IPO stocks may be available on platforms like EquityZen and Forge Global.

Note that these pre-IPO offerings will not always be available. For the latest updates, be sure to check their respective websites.

If pre-IPO shares are available for purchase, here are a few steps you can take to use secondary marketplaces:

1. Sign up with your chosen platform (e.g. EquityZen)
   
2. Verify your investor accreditation
   
3. Browse available offerings
   
4. Fund your account and buy shares

Requirements, including minimum investments, can differ between platforms. For example, EquityZen requires a $10,000 minimum.^[3]
Make sure to check all the requirements before creating an account.

Why Invest in Databricks?

Databricks could be a good investment because of its current market position and high revenue growth. Here are a few reasons you should consider investing in the company:

• Strong market position
  Databricks is the leader in the Lakehouse market, a new category for storing and analyzing data that combines the flexibility of data lakes with the structure of data warehouses. This market is expected to grow rapidly in the coming years, driven by the increasing demand for data analytics and AI.

• High revenue growth
  Databricks has seen impressive revenue growth in recent years. Databricks generated over $1.6 billion in revenue for its fiscal year ended January 31, 2024, marking over 50% growth over the prior year.^[4] This growth is expected to continue as more companies adopt the Lakehouse platform.

• Strong customer base
  Databricks has a large and diverse customer base, including established companies like Comcast, Condé Nast, and over 50% of the Fortune 500. This suggests the company's products and services are valuable to various organizations.

What is Databricks' Valuation?

In September 2023, Databricks secured over $500 million in funding through a Series I funding round. The deal values the company at $43 billion, with a share price of $73.50.

T. Rowe Price Associates, Inc. led the funding round and other funds and accounts they advised.^[5]

What Are the Alternatives to Databricks Stock?

There are a few notable competitors to Databricks in the Data Intelligence industry. Here are some of the top alternatives:

1. Azure HD Insight
   Enterprises looking for a cloud-based managed open-source analytics platform can rely on Azure HD Insight to provide a complete solution.

   This service is offered by Microsoft. It integrates popular tools such as Spark, Hive, LLAP, Kafka, and Hadoop into your Azure environment, enabling you to extract valuable insights from your data easily.

   You can invest in Microsoft by purchasing its company shares listed on the NASDAQ stock exchange under the ticker symbol MSFT.

2. Amazon Athena
   Amazon Athena is a cost-effective and hassle-free solution for analyzing data stored in S3. With Athena, you don't have to worry about managing any infrastructure. This platform is highly favored by data analysts, data scientists, and anyone who needs to derive valuable insights from their cloud-stored data.

   It is owned by Amazon, whose stock is traded on NASDAQ under the AMZN ticker.

3. Alteryx
   Alteryx is a data analytics and visualization platform that helps users prepare, blend, and analyze data from various sources without extensive coding knowledge.

   It is publicly traded on NYSE with ticker symbol AYX.^[6]

Bottom Line

Databricks is a promising data and AI leader. But it's still a private company, meaning you can't buy shares through major stock exchanges.

However, you have alternative options like pre-IPO or indirect investments through its publicly traded competitors like Amazon Athena or Azure HD Insight.

With any kind of investment, always do your research and consider your risk tolerance. It's best to consult with a financial advisor before making any decisions.

References