Rallying 35%: report and Amazon partnership revive interest in Snowflake stock

Shares of Snowflake, a developer of cloud-based data platforms, soared by more than a third in pre-market trading on Ma. 27 after the company's fiscal Q1 2027 earnings beat Wall Street expectations, writes Barron's. The company also announced an expanded partnership with Amazon Web Services (AWS) that commits $6 billion over five years to develop artificial intelligence infrastructure

Snowflake shares soared 35% at the premarket on Thursday, May 28, sharply changing trajectory after falling 1.2% in the main trading session a day earlier. Prior to the postmarket rally, the company's securities were 20% cheaper than they were at the beginning of the year. However, they have mostly rallied over the past month and a half, adding 45% from their local low on April 10. Snowflake is actively proving to investors that the cloud storage sector may prove resilient to the tectonic shifts that artificial intelligence is bringing to the software industry, Barron's notes.

Results for its fiscal first quarter seem to support those arguments, the publication said. For the period ended April 30, Snowflake recorded adjusted earnings of 39 cents per share, compared with 24 cents a year earlier. Revenue rose 33% to $1.39 billion. Wall Street analysts had expected adjusted earnings of 32 cents per share on revenue of $1.3 billion, Barron's noted.

Snowflake continues to record a net loss under standard accounting rules (GAAP), with a net loss of 86 cents per share in the first quarter.

For the second quarter, Snowflake forecasts product revenue in the range of $1.415 billion to $1.42 billion - better than analysts' consensus forecast of $1.37 billion. As for the full fiscal year, the company, which is positioning itself as a cloud-based data platform for AI, expects annualized product revenue of $5.84 billion. That assumes 31% year-over-year growth and beats both the company's own previous forecast of $5.66 billion and Wall Street's expectations of $5.67 billion, Barron's writes.

Snowflake said it raised its full-year forecast due to "strong momentum" in its core data platform business and AI segment.

"AI continues to accelerate our core data platform business as customers migrate to Snowflake with increasing haste," said CFO Brian Robins.

Perhaps an even stronger buying catalyst than the quarterly results was the announcement of the AWS deal, Barron's points out. As part of the expanded partnership, Snowflake is making a multi-year commitment to invest $6 billion in Amazon's cloud infrastructure. Snowflake emphasized that the amount reflects "accelerating business demand for AI computing and data processing powered by AWS."

"Together with AWS, we're making it easier for enterprise customers to embed AI directly into their managed data. This will enable them to move faster, act with greater transparency, and create measurable impact across the business," said Snowflake CEO Sridhar Ramaswamy.

Snowflake's steady growth comes amid general investor concerns that AI agents will fundamentally reshape the software industry, Barron's notes. Experts expect enterprise customers to start using AI to write their own software, with machine algorithms gradually replacing humans on work networks. This jeopardizes the traditional pay-per-user subscription model. However, Snowflake's business model has been protected from such shifts because its revenue is initially tied to actual consumption of cloud services, Barron's writes.

Moreover, cloud storage platforms are becoming the primary beneficiaries of the AI revolution. Snowflake is proving to investors that not only will its services not depreciate, they will become mission-critical. Like humans, AI agents need access to vast amounts of cleansed and structured data, but they are able to analyze information many times faster. Outsourcing work tasks to machines will increase cloud capacity consumption, which will directly increase a company's revenue. In addition to this, Snowflake is actively implementing its own AI solutions, which are already starting to gain traction in the market, Barron's explains.

At the moment, Wall Street analysts remain positive on Snowflake shares. Out of 53 experts, the vast majority - 46 of them - recommend buying or building up positions (Buy and Overweight ratings). Another six analysts advise to hold the securities, and only one expert recommends selling.

This article was AI-translated and verified by a human editor