What Happened?
Shares of cloud data platform provider Snowflake (NYSE: SNOW) jumped 10% in the afternoon session after the company continued to rally on strong first-quarter results and received a price target upgrade from Wedbush Securities, fueled by optimism around artificial intelligence demand.
This move extends a significant rally that began after Snowflake reported its fiscal 2027 first-quarter results. The company posted product revenue of $1.33 billion, beating its forecast and marking a 34% year-over-year increase. This strong performance, driven by high demand for its AI products, led management to raise its full-year product revenue guidance.
Adding to the positive sentiment, Wedbush Securities raised its price target on the stock to $280 from $270, maintaining its outperform rating and citing the critical phase of AI monetization. An analyst from the firm noted that data integration is the primary engine for software enterprise growth.
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What Is The Market Telling Us
Snowflake’s shares are very volatile and have had 23 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 4 days ago when the stock gained 38.8% on the news that it added more than $20 billion in market cap following its impressive Q1 earnings, warranted by what was genuinely a turning-point quarter having been written off as an AI casualty.
The headline numbers were strong on their own. Revenue grew 33% to $1.39 billion, beating the $1.32 billion consensus, while adjusted EPS of $0.39 crushed the $0.32 estimate by 22%. But the figure that mattered was product revenue growth accelerating to 34% year-over-year (up from 30% last quarter and 26% a year ago).
The reason for the acceleration is specific and consequential: Cortex Code (internally called "CoCo"), Snowflake's AI coding agent, went live in February and spent Q1 in the hands of customers for the first time. By quarter-end it had 7,100 active accounts. Notably, CFO Brian Robins confirmed that CoCo was "the largest driver" of the full-year guidance raise to $5.84 billion in product revenue (up from $5.66 billion).
Layered on top of the earnings, Snowflake announced a $6 billion multi-year infrastructure commitment to Amazon Web Services, including use of AWS's custom AI chips. This cements Snowflake's relationship with its most critical go-to-market partner and signals confidence in its own future workload volumes at a scale that is hard to fake. In short: the growth was accelerating when investors expected deceleration, the AI products are now contributing real revenue, the full-year guide went up by $180 million, and a $6 billion strategic deal with AWS was announced on the same night.
Snowflake is up 29.3% since the beginning of the year, and at $280.17 per share, it has set a new 52-week high. Investors who bought $1,000 worth of Snowflake’s shares 5 years ago would now be looking at an investment worth $1,163.
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