Why Snowflake Stock Surged 36% in Premarket Trading

Snowflake Inc. (NYSE: SNOW) saw its stock jump 36% in premarket trading on Thursday after delivering a standout fiscal 2027 first-quarter report. The company exceeded Wall Street estimates across all key metrics, including adjusted earnings per share of $0.39 (vs. $0.32 expected) and product revenue of $1.33 billion, up 34% year-over-year. Non-GAAP operating margin expanded to 12% from 7.9% in the prior year, exceeding analyst forecasts of 9.2%, while adding just 17 organic employees during the quarter. The primary driver behind the results was Cortex Code, Snowflake’s AI coding assistant launched on February 5, which became the largest contributor to the upgraded guidance. By quarter-end, over 7,100 customer accounts were using the tool, boosting AI-related sales and platform activity. CEO Sridhar Ramaswamy called AI a ‘powerful tailwind,’ marking Q1 as an ‘inflection point’ in the company’s growth trajectory. Snowflake raised its full-year outlook, now expecting second-quarter product revenue of $1.415–$1.420 billion (30% YoY growth) and full-year revenue of $5.84 billion (31% growth), up from prior guidance of $5.66 billion. The company also increased its non-GAAP operating margin target to 13.5% from 12.5% and announced two major strategic moves: a $6 billion, five-year infrastructure deal with Amazon Web Services and plans to acquire Natoma, an enterprise AI agent platform. Wall Street reacted positively, with Morgan Stanley raising its price target to $300 from $245 and calling the quarter a ‘blockbuster.’ Bernstein also lifted its target to $250 from $195, noting Snowflake had ‘checked all the boxes’ in addressing growth concerns. The company’s net revenue retention improved to 126%, and it added 616 net new customers, a 38% increase year-over-year, with 779 customers generating over $1 million in trailing revenue.