Snowflake Surges 35% on AI Momentum, Lifting Software Sector

CNBC reported Thursday that shares of Snowflake soared roughly 35%, putting the data-cloud company on course for its best single session on record. The gains followed a strong quarterly earnings print and a sweeping new AI compute agreement with Amazon.

A $6 Billion Amazon Deal Anchors the Rally

Snowflake announced plans to direct $6 billion toward compute capacity sourced from Amazon, deepening its reliance on the cloud giant’s in-house AI chips. The company simultaneously topped Wall Street’s adjusted earnings-per-share and product-revenue forecasts for its fiscal first quarter. Finance chief Brian Robins told analysts that AI tools including Cortex Code are producing what he described as a step-function shift in the company’s revenue potential. He added that AI is also reshaping internal operations, combining leaner hiring with higher cloud expenditure.

Guidance Raised as Customer Spending Accelerates

Snowflake lifted its forward outlook alongside the earnings beat. The company now targets product revenue of $1.415 billion to $1.420 billion in its fiscal second quarter, with an adjusted operating margin near 12.5%. Analysts had penciled in $1.37 billion in revenue and an 11.9% margin. Customer metrics were equally striking. Snowflake added 616 net new clients in the quarter, a 38% year-over-year rise, and now counts 779 customers spending more than $1 million on a trailing twelve-month basis.

The SaaSpocalypse Narrative Takes a Hit

Software stocks had been battered for months by fears that generative AI tools would cannibalize traditional software-as-a-service subscriptions, a scenario widely dubbed the “SaaSpocalypse.” Snowflake’s results punctured that concern for at least a session. ServiceNow climbed roughly 5% on the coattails of the report, while Oracle and Palantir each added more than 3%. Salesforce did not share in the celebration, finishing largely flat after releasing guidance that left investors unimpressed.

Acquisitions and Analyst Reaction Round Out the Picture

Snowflake also said it will acquire AI startup Natoma, though no deal price was disclosed. Analysts at JPMorgan wrote that Snowflake’s combination of growth and cash-flow characteristics should prove its business model’s durability across economic cycles. The stock has now recovered its year-to-date losses and sits roughly 6% higher for 2026. Thursday’s session suggests the market is treating AI monetization at Snowflake as an inflection point rather than a promise.

Read Next: Nvidia’s $150 Billion Spending Plan Sends Taiwan Chip Stocks Higher