Snowflake Stock Is Soaring After a Blowout Quarter and a New $6 Billion AWS Deal

Shares of data cloud specialist Snowflake (NYSE:SNOW) soared more than 30% as of this writing after the company reported fiscal first-quarter results on Wednesday and, the same evening, unveiled a five-year, $6 billion spending commitment to Amazon (NASDAQ:AMZN) and its cloud arm, Amazon Web Services (AWS). The move lifted the stock to a year-to-date high -- a sharp turn for a name that had been a laggard this year, down about 19% in 2026 before the report.

There was plenty to like in Snowflake's latest update. Product revenue growth reaccelerated, and a closely watched measure of customer spending turned higher for the first time in more than a year. On top of that, management lifted its full-year outlook. Pair all of that with a giant new vote of confidence in the Amazon deal, and it isn't hard to see why investors piled back in.

But a one-day jump this large raises a fair question for anyone eyeing the stock today: how much of the good news is already in the price?

Image source: Snowflake.

A growth story, reignited

Importantly, the update showed a trend of reaccelerating growth.

Product revenue rose 34% year over year to $1.33 billion in the fiscal first quarter of 2027 (the period ended April 30, 2026), up from 30% growth in the prior quarter and 26% a year earlier.

Just as telling was the company's net revenue retention rate, which tracks how much more existing customers spend compared with a year earlier. That figure climbed to 126% -- its first uptick after three consecutive quarters at 125% following a long slide amid fears the business was cooling. A reading above 100% means customers keep spending more over time, so the renewed climb in the key metric suggests customer usage growth is accelerating.

Much of Snowflake's business momentum traces to artificial intelligence (AI). Management said AI is pulling more work onto the platform and lifting use of Snowflake's core data tools, with newer offerings like its Snowflake Intelligence assistant among the fastest-adopted products in company history -- accounts using Snowflake Intelligence more than doubled from the prior quarter.

Given the company's strong overall results, management raised its full-year product revenue forecast to $5.84 billion, implying roughly 31% growth, up from a prior call for about 27%. It also nudged up its full-year non-GAAP (adjusted) operating margin target.

The Amazon commitment -- and the catch

Then there was the $6 billion deal.

Alongside earnings, Snowflake said it would spend that sum on AWS over five years -- roughly $1.2 billion a year -- to tap AWS Graviton processors and AI infrastructure. It's worth being clear about which way the money flows here: this is cash leaving Snowflake, not arriving.

Even so, investors cheered, and the logic holds up. The size of the pledge is itself a signal. A company doesn't lock in infrastructure on that scale unless it expects the workloads to fill it. And the deal may help with costs, too. On the earnings call, chief financial officer Brian Robins pointed to lower bandwidth costs from the agreement as a reason Snowflake can hold "the same product gross margin at 75% for the full year," even while absorbing a drag from its recent Observe acquisition.

Overall, I think Snowflake's results and the AWS deal strengthen the bull case.

But has the stock's reaction already priced in all the good news?

The stock now commands a lofty price-to-sales ratio of about 17, leaving very little room for error.

Sure, Snowflake may well be entering a stronger chapter. But after a move this size, much of the incremental good news could already, indeed, be reflected in the price. For now, I'd personally opt to stay on the sidelines here, hoping for either a pullback from these new year-to-date highs or for fundamentals to catch up to the price over time.

Daniel Sparks and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Snowflake. The Motley Fool has a disclosure policy.