Snowflake's stock blasts off, fueled by AI acceleration and deeper Amazon partnership

By Tomi Kilgore

Cloud software company makes $6 billion commitment to expand collaboration with AWS, and the stock is headed for its biggest gain ever

Snowflake's stock soared toward a record gain after an earnings beat, a raised outlook and a $6 billion commitment to expand its collaboration with Amazon's AWS.

Shares of Snowflake were rocketing toward their biggest-ever gain in early Thursday trading, after the cloud software company beat fiscal first-quarter earnings expectations by a wide margin and announced an expanded relationship with Amazon.com.

As use of artificial intelligence by companies accelerates, demand for the company's core data-platform business continues to grow, Snowflake Chief Financial Officer Brian Robins said. During the latest quarter, 46 customers crossed the threshold of spending more than $1 million on a trailing 12-month basis, Robins said, which compares with 26 customers a year ago.

But earnings reported late Wednesday weren't the only thing investors cheered. The company also announced a $6 billion commitment to strengthen its relationship with Amazon's (AMZN) AWS cloud business to help the companies' joint customers build and deploy AI faster.

"AI has generated enormous excitement, but for enterprises, the real challenge and opportunity is turning intelligence into action," said Snowflake CEO Sridhar Ramaswamy.

"With AWS, we are making it easier for enterprises to bring AI directly to governed data, so they can move faster, operate with greater clarity, and create measurable impact at scale," Ramaswamy added.

Snowflake's stock (SNOW) shot up 38.4% in Thursday's premarket, to put it on track to break its record one-day gain of 32.7% seen on Nov. 21, 2024. The stock was also set to open around the highest prices seen during regular-session hours since Dec. 3, 2025.

Meanwhile, Amazon shares edged up 0.1% in premarket trading.

The rally puts an exclamation point on the stock's turnaround this month, as the narrative around how AI would affect many software stocks seems to have reversed to positive from negative. Snowflake's stock has soared 28.4% in May through Wednesday's close, which puts it on track to snap a six-quarter losing streak in which the stock has tumbled 50.4%.

Raymond James analyst Adam Tindle said the company's results and outlook answered the key investor debate on whether AI would actually add to profit sales.

"We believe this squarely places Snowflake in the AI winner camp, with a differentiated ability to monetize both business users and builders through AI functionality embedded directly into the data platform," Tindle wrote in a note to clients.

Benchmark's Yi Fu Lee shared similar thoughts in a research note: "In our view, the narrative has decisively shifted from stabilization to AI-driven re-acceleration, with Snowflake increasingly positioned to capture a disproportionate share of enterprise AI spend."

For the fiscal first quarter to April 30, total revenue grew 33.5% from a year ago to $1.39 billion, above the average analyst estimate compiled by FactSet of $1.32 billion.

Product revenue jumped 33.9% from a year ago, and increased 8.8% from the previous quarter, to $1.33 billion, to beat the FactSet consensus of $1.27 billion. That beat was by the widest margin in just under four years, according to FactSet data.

Ramaswamy said Snowflake delivered a "milestone quarter," as product revenue marked "the strongest sequential dollar growth in our history."

Adjusted earnings per share, which excludes nonrecurring items, such as stock-based compensation-related charges, rose to 39 cents from 24 cents, and topped expectations of 32 cents.

Looking ahead, the company expects product revenue for the current second quarter of $1.415 billion to $1.42 billion, which is above the current FactSet consensus of $1.37 billion.

For the full fiscal year, the company raised its product-revenue guidance to $5.84 billion from $5.66 billion.

-Tomi Kilgore

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

05-28-26 0823ET