Financial report exceeded expectations across the board, and achieved a turnaround in the annual decline with a binding of 6 billion dollars over five years with AWS Snowflake (SNOW.US) overnight.

On Wednesday (May 27), after the US stock market closed, the cloud data platform Snowflake (SNOW.US) announced its financial report for the first quarter of the 2027 fiscal year. Thanks to both revenue and profit surpassing market expectations, and a significant increase in the full-year product revenue outlook, as well as announcing a blockbuster $6 billion agreement with Amazon.com, Inc. (AMZN.US) AWS, the company's stock price surged by about 37% in after-hours trading, reversing the trend of a roughly 20% decline earlier in the year. The financial report showed that in the first fiscal quarter ending on April 30, Snowflakes product revenue increased by 34% year-on-year to $1.33 billion, with total revenue reaching $1.39 billion, up 33% year-on-year, significantly higher than the market's expected $1.32 billion; adjusted earnings per share was $0.39, also exceeding analysts' expectations of $0.32. For the current second fiscal quarter, the company expects product revenue to be between $1.415 billion and $1.420 billion, with an adjusted operating profit margin of approximately 12.5%, both significantly better than the market's expected revenue of $1.37 billion and profit margin of 11.9%. What's more exciting for investors is that Snowflake has raised its forecast for product revenue for the 2027 fiscal year (ending in January 2027) from $5.66 billion given in February to $5.84 billion, higher than Wall Street's generally expected $5.68 billion. Product revenue accounts for about 95% of Snowflake's total revenue. CEO Sri Rama Swami attributed this to the strong performance of the core data platform business and the "meaningful improvements" brought by AI tools. He revealed that the number of customers using the company's AI-assisted coding tools doubled on a month-on-month basis, reaching 7,100, and the new AI products had grown into "businesses with independent value". At the same time, Snowflake announced the acquisition of AI startup Natoma, further betting on artificial intelligence. Five-year $6 billion alliance with AWS, noteworthy chip collaboration Another news that ignited the market was that Snowflake signed a five-year strategic cooperation agreement with its largest cloud partner AWS, with a total contract amount of $60 billion, averaging approximately $12 billion in annual expenditures. Compared to the $1.2 billion over five years revealed during its 2020 IPO and the expanded to $2.5 billion by 2023, this cooperation scale has exponentially risen. Under the agreement, Snowflake will significantly expand its adoption of AWS's in-house Graviton general-purpose processor and cloud-based GPUs for AI. The two parties will also deeply integrate around generative AI and intelligent agent AI, expand the market jointly through the AWS Marketplace, and drive enterprise customers from AI experimentation to large-scale daily deployments. It is worth noting that Amazon.com, Inc. has recently acquired major AI companies such as Anthropic and OpenAI, and this agreement with Snowflake further demonstrates AWS's strong momentum in the AI infrastructure field, especially in the self-developed Arm architecture chip area. As AI applications shift from chatbot-based AI to task-oriented "intelligent agent AI," the demand for general-purpose computing CPUs has significantly increased. In addition to Snowflake, Meta (META.US) also announced it would deploy hundreds of thousands of Graviton chips. Commenting on the agreement, Rama Swami said, "Our teams worked very well together, driving many businesses forward." DA Davidson analyst Gil Luria praised, "In recent weeks, individual stocks in the software industry have shown clear differentiation, with winners and losers emerging, and Snowflake is clearly a winner in this round of market momentum." He added that the new agreement reached with Amazon.com, Inc. added new momentum to Snowflake's growth path, "allowing Snowflake to play a larger role in the customer's transition to AI and making its relationship with its largest partner even closer."