Shares of Snowflake surged 36% in premarket trading on Thursday after the cloud data company raised its annual product revenue forecast and unveiled a five-year AI infrastructure deal valued at $6 billion with Amazon Web Services. If the gains hold through regular trading, the jump would add more than $20 billion to Snowflake's market capitalization.
Snowflake's stock had been down about 20% year-to-date prior to the rally. The sharp rebound illustrated how much skepticism had accumulated around data software names during a broader AI software sell-off. "It tells you just how much scepticism had built up as data names were caught in the broader AI software sell-off," said Matt Britzman, senior equity analyst at Hargreaves Lansdown. "But it also shows how quickly sentiment can turn when a company shows AI is already helping the top line, rather than simply decorating the slide deck."
The pop in Snowflake shares carried through to some peers. Datadog and MongoDB climbed 5.9% and 10.4%, respectively, following Snowflake's stronger-than-expected report and partner announcement.
Snowflake has been incorporating AI across its platform, which customers use to unify data from multiple sources, run analytics and develop AI-driven applications. The company cited growing adoption of tools such as Cortex Code and Snowpark, which support building generative AI applications and deploying machine learning models against customer data.
The agreement with AWS is intended to accelerate Snowflake's enterprise AI efforts by leveraging AWS Graviton processors and infrastructure, enabling deeper technical integrations and coordinating joint go-to-market activities. Management said the partnership should help customers move AI initiatives from pilot projects into production environments.
Analysts at Morningstar described the collaboration as likely to bolster Snowflake's position as a leading data platform inside the AWS ecosystem, improving its ability to defend against competitors including Databricks and Google BigQuery.
Investor reaction extended to the sell-side: at least 22 brokerages raised their price targets on Snowflake after the results and announcement. The company trades at 85.21 times its estimated earnings for the next 12 months, compared with 12.73 times for Salesforce and 47.17 times for MongoDB, highlighting valuation differences within the enterprise software group.
The episode underscores how AI-linked product traction and strategic cloud partnerships can rapidly change market perceptions for data-focused software firms, while also drawing attention to elevated valuation multiples and competitive dynamics in cloud and enterprise AI infrastructure.