Snowflake (SNOW.US) reported its fiscal first-quarter 2027 results after the market closed on Wednesday, May 27, Eastern Time. The cloud data platform delivered a strong performance, exceeding market forecasts for both revenue and profit. Coupled with a significant upward revision to its full-year product revenue outlook and the announcement of a major $6 billion agreement with Amazon Web Services (AWS), the company's stock surged approximately 37% in after-hours trading, completely reversing its year-to-date decline of around 20%.

For the quarter ended April 30, Snowflake's product revenue increased 34% year-over-year to $1.33 billion. Total revenue reached $1.39 billion, a 33% increase and significantly above market expectations of $1.32 billion. Adjusted earnings per share were $0.39, also surpassing analyst estimates of $0.32.

For the current second fiscal quarter, the company anticipates product revenue to be between $1.415 billion and $1.420 billion, with an adjusted operating margin of approximately 12.5%. Both figures are notably better than market expectations of $1.37 billion in revenue and an 11.9% margin.

More notably for investors, Snowflake raised its product revenue forecast for fiscal year 2027 (ending January 2027) to $5.84 billion, up from the $5.66 billion projected in February. This new guidance exceeds the Wall Street consensus estimate of $5.68 billion. Product revenue constitutes roughly 95% of Snowflake's total revenue.

CEO Sridhar Ramaswamy attributed the strong results to robust performance in the core data platform business and a "meaningful lift" from AI tools. He revealed that the number of customers using the company's AI-assisted coding tool has doubled sequentially, reaching 7,100. The nascent AI products have grown into "a business of its own value," he noted. Simultaneously, Snowflake announced the acquisition of AI startup Natoma, furthering its bet on artificial intelligence.

**Five-Year, $6 Billion AWS Partnership and Chip Collaboration**

Another market-moving announcement was Snowflake's strategic collaboration agreement with its largest cloud partner, AWS. The five-year deal, valued at $6 billion, represents an average annual commitment of approximately $1.2 billion. This scale marks an exponential leap compared to the $1.2 billion, five-year deal disclosed at its 2020 IPO and an expanded $2.5 billion deal in 2023.

Under the agreement, Snowflake will significantly expand its adoption of AWS's in-house Graviton general-purpose processors and cloud GPUs for AI workloads. The two companies will also deepen product integration around generative AI and agent AI. They plan to jointly expand their market reach through the AWS Marketplace, aiming to help enterprise customers transition from AI experimentation to large-scale, everyday deployment.

It is noteworthy that Amazon has recently secured major deals with AI firms like Anthropic and OpenAI. This agreement with Snowflake further underscores AWS's strong momentum in the AI infrastructure space, particularly in its in-house Arm-based chips. As AI applications shift from chatbots to task-oriented "agent AI," demand for general-purpose computing CPUs has rebounded significantly. Beyond Snowflake, Meta (META.US) has also announced plans to deploy hundreds of thousands of Graviton chips.

Ramaswamy, commenting on the deal, stated, "Our teams have worked very well together, driving a lot of business for each other."

DA Davidson analyst Gil Luria noted, "In recent weeks, software stocks have shown clear divergence, separating winners from losers, and Snowflake is clearly a winner in this cycle." He added that the new agreement with Amazon provides an additional growth vector for Snowflake. "This allows Snowflake to play a larger role as customers move towards AI and tightens its relationship with its largest partner," Luria said.