Snowflake reported a first-quarter beat across the board, sending shares up 36% and extending five-day gains beyond 50%. The company also said it will pay Amazon $6 billion over the next five years for Graviton chips, signaling strong demand for its services. After a broader SaaS slump driven by fears that AI would replace traditional software, Snowflake’s revenue grew 33% year over year, the fastest pace in two years. Management said the results validated Snowflake’s consumption-based pricing model and demonstrated that traditional software can transition to AI compute. Ramaswamy emphasized that revenue is recognized only when customers use Snowflake’s capabilities, requiring value to generate money.
"Snowflake is among a pack of companies anchoring themselves after launching major AI initiatives that incorporate agentic technology with the data the company handles. The strong Q1 results (revenue grew 33% year-over-year, the fastest pace in two years) validated the consumption-based pricing model the company has long had, Ramaswamy said, and showed that traditional software can transition to AI compute."
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