Snowflake Stock Jumps 37% After Q1 FY2027 Earnings: AWS Deal, AI Growth and Guidance Raise Explained

Snowflake (NYSE: SNOW) stock jumped over 37% in after-hours trading on May 27, 2026 marking its biggest single-day gain in years, after the company posted Q1 FY2027 earnings that didn't just beat expectations, but shattered the narrative that had been weighing on the stock all year. Product revenue came in at $1.33 billion, up 34% year-over-year, the strongest sequential dollar growth in the company's history. And then there was the Amazon deal. The $6 billion multi-year AWS commitment sealed the night as a true inflection moment.

Let's break down what actually changed in Snowflake's business, why the guidance raise stunned Wall Street, and what investors may still be underestimating.

Snowflake Q1 FY2027 Earnings: Revenue, EPS and Margin Beat Estimates

Before we get into the "why it matters" part, here's the clean picture. Snowflake came in well above every major consensus estimate:

Source: Snowflake Investor Relations, Yahoo Finance/Zacks consensus, Q1 FY27 Earnings Report (May 27, 2026)

The operating margin beat is worth pausing on. Snowflake guided for 9%, delivered 12%. That's not a small rounding error, that's 300 basis points of outperformance on top of a significant revenue beat. Both happening together in the same quarter? That's the kind of print that forces even the skeptics to sit up.

Snowflake AWS Deal: Why the $6 Billion Amazon Partnership Matters

On the same evening, Snowflake announced a $6 billion, five-year strategic collaboration agreement with Amazon Web Services (AWS). The money goes toward AWS's custom Graviton processors and AI GPU infrastructure.

To understand why this matters, think of it this way: if ChatGPT-style AI is a librarian answering questions, agentic AI is an entire team of assistants who go out and do tasks on your behalf, tasks like booking flights, reading contracts, executing trades. That kind of AI doesn't just need GPUs for training; it needs massive general-purpose compute power (CPUs) to orchestrate workflows across multiple agents simultaneously. That's exactly what Amazon's Graviton chips are built for.

This deal isn't just a vendor contract. It's a strategic signal. Snowflake has been on AWS since day one. Its five-year AWS spending commitment has grown from $1.2 billion at its IPO in 2020, to $2.5 billion in 2023, to $6 billion today. Each jump tracks almost perfectly with where Snowflake's business was heading. This one tracks with agentic AI.

Source: GeekWire, CNBC, Snowflake Press Release (May 27, 2026)

Snowflake has also now crossed $7 billion in lifetime AWS Marketplace sales, exceeding $2 billion in calendar year 2025 alone, more than doubling year-over-year. 

And separately, Snowflake announced it signed a definitive agreement to acquire Natoma, an enterprise Model Context Protocol (MCP) platform for AI agents, essentially the plumbing that lets AI agents securely connect to enterprise tools, databases, and workflows. This is Snowflake saying: we're not just where your data lives, we're the governance layer for everything your AI agents do.

Why Snowflake’s Business May Be Re-Accelerating After Q1 FY2027

This wasn't just a good quarter. Something structurally shifted.

1. Growth re-accelerated. This is extremely rare for a software company at Snowflake's scale. Product revenue grew 34% in Q1 FY27, up from 30% in Q4 FY26. At $1.33 billion in quarterly revenue, growing faster than the prior quarter, Snowflake is doing something most enterprise software companies simply can't do at this size.

2. The NRR tick-up matters more than it looks. Net Revenue Retention (NRR) rose to 126% from 125% marking the first uptick in five consecutive quarters. For context: NRR tells you how much existing customers are spending compared to a year ago. Think of it like this: if 100 friends all subscribed to a meal-kit service last year, an NRR of 126% means those same 100 people are now collectively paying 26% more, either because they're ordering more, or buying premium add-ons. Snowflake's NRR had been under pressure as large customers optimized cloud spend. The fact that it's now ticking up, with Cortex AI still early in its rollout, is the signal that AI monetization is arriving.

3. Cortex Code is accelerating migrations. Snowflake's AI coding tool, Cortex Code (CoCo), went to general availability on February 5, 2026, the very first week of Q1. Analysts covering the quarter note that CoCo is compressing enterprise migration timelines from traditional data warehouses from what used to be a 2-year project down to 1-2 quarters. Faster migrations mean contracted RPO converts to recognized revenue much faster. That structural acceleration in the revenue model is not fully priced in by the market yet.

4. AI accounts are surging. Over 13,600 accounts now use Snowflake AI features, with approximately 4,500 net new accounts added in Q1 alone. In Q4 FY26, that number was 9,100. 

Snowflake FY2027 Guidance: Product Revenue Raised to $5.84 Billion

Snowflake also raised its full-year FY2027 guidance.

Source: Snowflake Investor Relations, Q1 FY27 Earnings Press Release

For Q2 FY27 specifically, the company guided product revenue of $1.415-1.42 billion, implying approximately 30% year-over-year growth, ahead of what the Street was modeling. Bloomberg and CNBC both confirmed the guidance raise was the primary catalyst for the after-hours move, alongside the AWS deal.

Snowflake Stock Analyst Ratings and Price Targets

Before the earnings report, analyst consensus had Snowflake at an average 12-month price target of approximately $229-248, with a Buy rating from the majority of covering analysts. Key notes:

• Bank of America had raised its target from $195 to $205 just ahead of earnings, with analyst Ikeda citing "robust demand that SNOW was seeing heading into 2026" and consistent market share expansion in enterprise AI.
• TD Cowen reaffirmed its Buy rating, pointing to resilient demand and AI tailwinds. 
• Citizens carried the Street-high price target of $325. 
• Cantor Fitzgerald had an Overweight rating with a $225 target going in.
• Multiple firms including Citi, Wells Fargo, Jefferies, Morgan Stanley, DA Davidson, and Goldman Sachs had flagged Snowflake as well-positioned for AI workloads in pre-earnings research notes. 

Source: Yahoo Finance, Benzinga, TipRanks

Post-earnings price target revisions are expected to come through, given that the stock had been trading near $175 and jumped to approximately $238 in after-hours, a meaningful upward revision across the Street is likely.

What Might Snowflake Investors Still Be Underestimating?

• The GAAP picture still bleeds. Snowflake posted a GAAP operating loss of $326 million in Q1 FY27. Stock-based compensation (SBC) remains elevated at over $430 million in the quarter alone. This means the company's GAAP losses, which persist even as it grows, are mostly a function of equity compensation, not business weakness. But it does explain the insider selling that spooked some investors in May. The non-GAAP story is genuinely strong; the GAAP story still requires patience.
• The RPO-to-revenue acceleration. Snowflake's RPO, essentially pre-booked future revenue that customers have committed to spend, stood at $9.21 billion, growing 38% year-over-year. As Cortex Code accelerates how fast customers migrate and consume, this RPO converts to revenue faster. 
• Agentic AI changes Snowflake's TAM math. Snowflake estimates its total addressable market growing from $170 billion in 2024 to $355 billion by 2029, more than a 2x expansion in five years. That growth is almost entirely driven by AI and agentic workloads. Snowflake's AWS deal, Natoma acquisition, and Cortex stack are all bets on capturing a meaningful share of that expansion.

What Snowflake’s Q1 FY2027 Results Mean for SNOW Stock Investors

If you already hold SNOW Stock: the Q1 results validate the long-term thesis. Revenue is re-accelerating, NRR is inflecting upward, margins are expanding faster than guided, and the company has locked in a strategic infrastructure relationship with AWS for the next five years. The stock remains down over 40% from its all time high, even after the after-hours surge, so the recovery from near multi-year lows adds context to the size of the move.

If you're evaluating SNOW Stock: the stock trades at a significant premium on a forward price-to-sales basis, and GAAP profitability is still a future goal rather than a present reality. The questions worth asking are: (a) does Cortex AI monetization sustain or is this quarter a one-time spike, and (b) will NRR continue to climb as AI upsell deepens? The RPO of $9.21 billion, nearly 7 quarters of current product revenue, gives ample visibility, but consumption-based revenue means that pipeline doesn't automatically convert.

The Bottom Line

Snowflake didn't just have a good quarter, it answered every major bear argument in a single print by re-accelerated growth, rising NRR, margin outperformance, a $6 billion AWS commitment, and a raised full-year guide. More importantly, it showed that the transition from data warehouse to AI control plane isn't a slide deck aspiration. It's already showing up in the numbers.

The question for the rest of FY27 is whether Cortex Code and Snowflake Intelligence can sustain this inflection or whether Q1 was the peak moment before competition from Databricks, hyperscaler bundling, and AI model commoditization catches up.

Given the evidence on the table right now, the bears have a lot more explaining to do than they did 24 hours ago.