What Happened?
Shares of cloud data platform provider Snowflake (NYSE: SNOW) jumped 38.8% in the afternoon session after it added more than $20 billion in market cap following its impressive Q1 earnings, warranted by what was genuinely a turning-point quarter having been written off as an AI casualty.
The headline numbers were strong on their own. Revenue grew 33% to $1.39 billion, beating the $1.32 billion consensus, while adjusted EPS of $0.39 crushed the $0.32 estimate by 22%. But the figure that mattered was product revenue growth accelerating to 34% year-over-year (up from 30% last quarter and 26% a year ago).
The reason for the acceleration is specific and consequential: Cortex Code (internally called "CoCo"), Snowflake's AI coding agent, went live in February and spent Q1 in the hands of customers for the first time. By quarter-end it had 7,100 active accounts.
Notably, CFO Brian Robins confirmed that CoCo was "the largest driver" of the full-year guidance raise to $5.84 billion in product revenue (up from $5.66 billion.
Layered on top of the earnings, Snowflake announced a $6 billion multi-year infrastructure commitment to Amazon Web Services, including use of AWS's custom AI chips. This cements Snowflake's relationship with its most critical go-to-market partner and signals confidence in its own future workload volumes at a scale that is hard to fake.
In short: the growth was accelerating when investors expected deceleration, the AI products are now contributing real revenue, the full-year guide went up by $180 million, and a $6 billion strategic deal with AWS was announced on the same night.
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What Is The Market Telling Us
Snowflake’s shares are very volatile and have had 21 moves greater than 5% over the last year. But moves this big are rare even for Snowflake and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 6 days ago when the stock gained 4.1% on the news that the U.S. General Services Administration (GSA) announced a new agreement to make the company's AI and cloud data products available to all federal agencies.
The "OneGov" deal is designed to help federal workers break down data silos and accelerate their IT modernization initiatives. Under the one-year agreement, government agencies receive significant price reductions, including a 20% discount on computer services and over 26% off storage costs.
The agreement also offers the potential for higher-tier discounts of up to 50% as usage increases, creating a strong incentive for adoption across the U.S. government and opening a significant new channel for the company.
Snowflake is up 11.7% since the beginning of the year, but at $242.05 per share, it is still trading 12.7% below its 52-week high of $277.14 from November 2025. Investors who bought $1,000 worth of Snowflake’s shares 5 years ago would now be looking at an investment worth $1,017.
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