Snowflake Boosts Outlook on AI Demand, AWS Pact
Snowflake increased its annual product revenue outlook as businesses boosted investments in AI applications and transferred more data workloads to its cloud platform, causing its shares to jump 36percent in after-hours trading.
The firm also secured a five-year agreement valued at $6 billion with Amazon Web Services to utilize AWS' Graviton processors and AI infrastructure, as their collaboration strengthens in enterprise AI.
The new agreement will feature enhanced product integrations focused on generative and agentic AI, broadened go-to-market initiatives via AWS Marketplace, and workload migrations designed to assist businesses in transitioning from testing AI projects to incorporating them on a regular basis.
"The recent agreement with Amazon introduces an additional factor to Snowflake's growth trajectory," stated Gil Luria, managing director at D.A. Davidson.
"It enables Snowflake to play an even larger role in their clients' shift to AI and strengthens their alignment with their key partner."
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Snowflake has gained from rising corporate demand for its primary data warehousing offerings, as shifts from outdated systems and greater adoption of machine learning tools provide added impetus. It has experienced significant usage of its tools like Cortex Code and Snowpark.
The firm has increased its product revenue outlook for fiscal 2027 to $5.84 billion, up from the previously estimated $5.66 billion.
"Due to a blend of strength in our fundamental data platform operations and significant growth from AI functionalities we are raising our FY27 forecast," stated CEO Sridhar Ramaswamy during a post-earnings call.
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Snowflake anticipates that its product revenue for the second quarter will range from $1.415 billion to $1.420 billion, in contrast to analysts' mean forecast of $1.37 billion, as per data gathered by LSEG.
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Revenue for the first quarter reached $1.39 billion, exceeding the forecast of $1.32 billion.