Snowflake stock is soaring and it may not be entirely because of Q1 earnings

Snowflake SNOW is ripping higher this morning after the cloud-based data platform announced a surprise $6 billion infrastructure partnership with Amazon Web Services (AWS).

Under this five-year strategic collaboration, SNOW is deeply committed to AWS custom Graviton processors and artificial intelligence (AI) infrastructure to drive enterprise agentic AI.

Including recent gains, Snowflake stock is trading at a year-to-date high of roughly $240.

Significance of Amazon deal for Snowflake stock

While the Amazon deal represents a major spending commitment rather than a direct cash injection, investors are, nonetheless, hailing it as a bullish catalyst.

By anchoring its future workloads to Amazon’s custom silicon and next-gen infrastructure, SNOW secures deep volume discounts “strategically engineered” to protect and expand its long-term gross margins.

SNOW stock is soaring because the transaction tightly locks in commercial alignment with its most critical go-to-market partner.

It ensures that Amazon’s massive enterprise sales force remains heavily incentivized to cross-sell Snowflake’s solutions via the AWS Marketplace, where it has already hit over $7 billion in lifetime sales.

Plus, the integration of Cortex AI with AWS infrastructure transforms the data cloud platform from a legacy target of AI disruption into operational plumbing needed to run routine enterprise generative AI applications.

JMP Securities sees further upside in SNOW shares

Snowflake shares are breaking out this morning also because the company’s solid Q1 results made JMP Securities’ senior analyst Patrick Walravens reiterate his bullish view and $325 price target.

In his research note, Walravens cited the company’s comprehensive data platform capabilities, which seamlessly address data engineering, advanced analytics, and native AI application development.

According to him, SNOW’s burgeoning AI suite, specifically “Snowflake Intelligence” and Cortex Code, provides a huge competitive advantage.

These tools automatically inherit the exact permissions, security protocols, and governance of the underlying enterprise data, solving the most critical operational blockers currently halting the enterprise adoption of autonomous AI agents.

JMP Securities also emphasized that the addressable market is expanding rapidly – projected to hit $355 billion by 2029, leaving plenty of runway for SNOW to comfortably thrive alongside major cloud competitors like Databricks.

How to play Snowflake after Q1 earnings

A “multi-billion dollar” infrastructure spend is only sustainable if top-line demand can validate it, and Snowflake’s financial metrics proved that the underlying consumption model is accelerating rapidly.

For Q1, the data giant posted adjusted earnings of $0.39 per share, decisively beating Wall Street consensus estimates of $0.32 per share.

Revenue jumped 33% year-over-year to hit $1.39 billion, coming in well ahead of the anticipated $1.32 billion.

Driven by this underlying operational strength and early momentum in AI tool adoption, CEO Sridhar Ramaswamy raised the full-year fiscal 2027 product revenue guidance to $5.84 billion, up from the previous forecast of $5.66 billion.

With remaining performance obligations (RPO) up 38% to $9.21 billion, the enterprise technology sector is receiving a clear signal.

The massive surge in SNOW shares proves that large-scale corporate clients are moving past the early experimentation phase of corporate AI, aggressively scaling their data pipelines into routine, high-volume production workloads.