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Snowflake shares surged in extended trading after the cloud data company raised its annual product revenue forecast and announced a large Amazon Web Services agreement tied to enterprise AI demand. The update came after Snowflake reported stronger first-quarter revenue, helped by higher use of its data platform and growing adoption of AI tools across business customers.
Snowflake said first-quarter revenue reached $1.39 billion, above analyst estimates of $1.32 billion, according to data compiled by LSEG. Product revenue rose 34% to $1.33 billion, also ahead of market expectations. Product revenue remains the company’s main sales source and accounts for most of its total revenue.
The company raised its product revenue forecast for fiscal 2027 to $5.84 billion, compared with its earlier projection of $5.66 billion. Analysts had expected about $5.68 billion. Snowflake also expects second-quarter product revenue between $1.415 billion and $1.420 billion, above the average estimate of $1.37 billion.
Chief Executive Sridhar Ramaswamy said on the post-earnings call, “Based on a combination of strength in our core data platform business and meaningful uplift from AI capabilities... we are increasing our FY27 outlook.”
Snowflake also signed a five-year agreement worth $6 billion with Amazon Web Services. The deal covers expanded use of AWS infrastructure, including Graviton processors and AI systems. The agreement deepens Snowflake’s existing partnership with Amazon as both companies focus on enterprise AI workloads.
Snowflake said the deal will support stronger product integrations around generative AI and agentic AI. It will also expand go-to-market work through AWS Marketplace and support workload migrations for companies moving more data operations to the cloud.
Ramaswamy said, “Our teams work exceptionally well together and we drive a lot of joint business.” The statement shows how Snowflake views AWS as a core partner as demand rises for data tools that support AI projects.
Meanwhile, Gil Luria, managing director at D.A. Davidson said, “The new deal with Amazon adds another element to the growth path for Snowflake.” He added, “It allows Snowflake to take an even bigger role in their customers' transition to AI and aligns them even more with their biggest partner.”
Snowflake has seen stronger demand for its core data platform as companies move from older systems to cloud-based data services. Businesses are also using more machine learning and AI tools, which has supported growth across Snowflake’s newer products.
Ramaswamy said the company’s AI-focused tools have become “legitimate businesses in their own right.” He also said customers using Snowflake’s AI-assisted coding tool doubled from the prior quarter to 7,100. This growth points to wider use of Snowflake products beyond storage and analytics.
The company has also agreed to acquire Natoma, a move aimed at strengthening AI governance. Natoma’s technology is expected to help companies manage secure and policy-compliant AI workflows. That area has become more important as firms adopt AI tools while keeping controls around data access and internal rules.
Snowflake shares rose as much as 36% in extended trading after the update. The stock reached about $230 after closing at $175.26. Before the report, Snowflake shares had fallen about 20% this year, amid investor concerns over how AI could change the software business model.
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