Snowflake Inc. saw its shares surge 29% in after-hours trading Wednesday after the data cloud company reported first-quarter results that beat Wall Street expectations and announced a massive $6 billion, five-year cloud infrastructure agreement with Amazon Web Services. The deal, focused on AWS's Graviton processors and artificial intelligence capacity, underscores the growing demand for AI-driven cloud services.
Strong First-Quarter Results
For the quarter ended April 30, Snowflake reported product revenue of $1.33 billion, up 34% year-over-year, while total revenue rose 33% to $1.39 billion. The company also raised its fiscal 2027 product revenue outlook to $5.84 billion, up from a prior forecast of $5.66 billion. Despite the strong top-line growth, Snowflake posted a GAAP net loss of $295.6 million, though non-GAAP diluted earnings per share came in at $0.39, up from $0.24 a year ago.
Record AWS Commitment
The new AWS deal represents Snowflake's largest infrastructure commitment with Amazon's cloud division. Snowflake plans to invest in Graviton compute—Amazon's custom Arm-based chips—and AI hardware over the five-year period. The partnership will also expand joint efforts on generative AI and agentic AI, systems that can autonomously manage tasks rather than simply providing answers.
Snowflake CEO Sridhar Ramaswamy described the company as entering "the era of the agentic enterprise," where AI systems help businesses leverage trusted data to drive outcomes. AWS CEO Matt Garman highlighted Snowflake's deeper adoption of Graviton chips, noting that it will deliver the cost, performance, and flexibility customers need to run data warehousing and AI workloads at scale.
AI Adoption Accelerates
Snowflake reported that over 13,600 accounts utilized its AI features during the quarter, with more than 7,100 accounts using Cortex Code. Additionally, Snowflake Intelligence accounts more than doubled sequentially. CFO Brian Robins noted that 779 customers now spend at least $1 million annually, with 46 reaching that threshold in the latest quarter. Robins attributed the improved full-year outlook to growth in data and AI units.
The company also reported passing $7 billion in lifetime AWS Marketplace sales, with over $2 billion in calendar 2025 sales expected through that channel. Customers like Fetch and Hex are running AI workloads on Snowflake using AWS with governed data.
Market Context and Competitive Landscape
The deal comes as major cloud providers compete to grow custom silicon sales. Microsoft is promoting its Cobalt Arm chips for Azure, while Google Cloud is selling its Axion custom Arm-based processors. Large providers are seeking ways to reduce costs and power consumption amid rising AI demand.
Snowflake competes with Databricks and the major cloud providers, though it maintains a close partnership with AWS. The new agreement locks in capacity and deeper product integration but also increases pressure on Snowflake to demonstrate sustained usage from AI initiatives, not just initial pilots.
Looking ahead, Snowflake projected second-quarter product revenue of $1.415 billion to $1.420 billion, above the analyst consensus of $1.37 billion. However, the company cautioned that product revenue is recognized only when customers use compute, storage, or data transfer services, making remaining performance obligations an unreliable guide for future revenue.
