Snowflake Inc. shares jumped in early trading on Thursday after the cloud data platform announced a major partnership with Amazon Web Services (AWS) and issued an upbeat quarterly forecast, lifting sentiment that had lagged behind rivals.
AWS partnership details
The company said it will integrate its data cloud with AWS's suite of analytics and machine learning services, allowing customers to seamlessly run workloads across both platforms. The deal marks a significant expansion of Snowflake's relationship with the largest cloud provider, which had previously been seen as a competitor.
Financial outlook
Snowflake forecast product revenue for the current quarter between $900 million and $905 million, above analyst estimates of $885 million. The company also reported first-quarter results that beat expectations, with product revenue rising 28% year-over-year to $865 million.
“Our partnership with AWS represents a paradigm shift in how enterprises leverage data,” said Snowflake CEO Frank Slootman in a statement. “By combining Snowflake’s data cloud with AWS’s unparalleled infrastructure, we are unlocking new possibilities for our customers.”
Market reaction
Investors cheered the news, sending Snowflake shares up more than 12% in premarket trading. The stock had fallen 15% year-to-date prior to the announcement, underperforming the broader tech sector.
Analysts at Morgan Stanley upgraded the stock to “overweight,” citing the AWS deal as a catalyst that could drive sustained growth. “This partnership addresses key concerns around Snowflake’s ability to compete in a multi-cloud world,” they wrote in a note.
Industry context
The announcement comes amid intensifying competition in the cloud data market, with rivals like Databricks and Google Cloud vying for market share. Snowflake’s partnership with AWS could help it win large enterprise customers who prefer a single-cloud strategy.
“This is a win-win for both companies,” said analyst Mark Moerdler of Bernstein. “AWS gets a powerful data platform to offer its customers, while Snowflake gains access to AWS’s massive sales force and customer base.”
Snowflake also announced a $2 billion stock buyback program, signaling confidence in its long-term prospects despite recent headwinds from a slowdown in cloud spending.
