Snowflake Surges on Amazon Deal and Raised Outlook

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•  27 May 2026
 

$SNOW Snowflake surged 30% in after hours trading after reporting quarterly results, driven by stronger forward guidance and a major multi year agreement with Amazon. The company raised its product revenue forecast to $5.84 billion for the fiscal year ending January 2027, implying growth of about 31%, above its prior February forecast of $5.66 billion and ahead of analyst consensus of about $5.68 billion. Product revenue represents roughly 95% of total operations, making the upgraded outlook a key signal for earnings momentum and potential multiple expansion. The move also shifts positioning across enterprise software, where investors had been questioning the pace of AI monetization and customer spending patterns.

The company also committed to $6 billion in AWS spending under a multi year agreement with Amazon that includes the use of Graviton chips. Beyond the scale of the commitment, the hardware component carries strategic importance because Graviton processors compete directly with Intel products and support Amazons broader internal silicon strategy. For Snowflake, the use of Graviton chips is aimed at lowering computing costs per workload as AI models increase infrastructure intensity. The agreement reflects deeper institutional flows between cloud providers and software vendors as AI demand tightens integration across the cloud ecosystem.

In the first fiscal quarter ended April 30, product revenue rose 34% to $1.33 billion, above expectations of about $1.27 billion. Remaining performance obligations, a metric tied to future contracted business, reached $9.21 billion, below forecasts of about $9.43 billion. That gap remains one of the main areas under review by the market as investors assess whether current growth is translating into a durable backlog or whether customer commitment patterns remain volatile. Even so, the combination of accelerating product growth and expanded AI adoption reinforced confidence around operating leverage and long-term consumption trends.

Chief Executive Officer Sridhar Ramaswamy said the number of customers using the AI based code assistance tools doubled from the previous quarter to 7,100. The figure points to active adoption rather than isolated pilot programs, although investors are still focused on the revenue contribution per customer and whether deployment expands further across enterprises. Despite the sharp rebound, the stock had declined about 20% since the start of the year before the latest move amid broader concerns around enterprise software demand and AI adoption cycles. The latest results materially reset sentiment around the growth profile and strategic positioning inside the AI infrastructure stack.

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