If you thought semiconductors like Micron Technology Inc. (NASDAQ:MU) and Intel Corp. (NASDAQ:INTC) were the only game in town for the AI rally, think again.
A new wave of outperformance is hitting the AI cloud layer, and it just produced one of the most violent single-day moves the software sector has seen this year.
Shares of Snowflake Inc. (NYSE:SNOW) rallied about 35% shortly after the open on Thursday, putting the stock on pace for its best day ever.
The move follows fiscal first-quarter results that landed well above Wall Street expectations.
Snowflake posted total revenue of $1.39 billion, up 33% from a year earlier, against a Street estimate near $1.32 billion. Product revenue, the metric analysts watch most closely, grew 34%.
Earnings came in at 39 cents per share versus the 32 cents analysts had penciled in.
Then came the guidance upgrade. Snowflake lifted its full-year fiscal 2027 product revenue forecast to $5.84 billion, implying growth accelerates to 31% from 29% the prior year.
What Snowflake Actually Does
Most large companies have their data scattered across dozens of systems that do not talk to each other. Snowflake sells a single cloud platform where a company can pour all of that data into one place, then run analytics and artificial intelligence on top of it.
Think of it as one giant, organized warehouse instead of a hundred messy closets. The cleaner and more centralized the data, the easier it is to build AI tools that actually work.
That last part is why the quarter mattered. The AI boom only pays off if companies can feed their models clean, governed data, and Snowflake is positioning itself as the place where that happens.
Two new products are driving the acceleration.
Cortex Code, an AI coding agent that went generally available in February, already has more than 7,000 customer accounts using it, roughly half of Snowflake’s base.
The company also struck a $6 billion, five-year spending commitment with Amazon.com Inc.’s (NASDAQ:AMZN) AWS and announced plans to acquire Natoma, a platform that lets AI agents act on company data securely.
How Analysts Reacted
Wall Street moved fast on Snowflake, and the language was bullish.
Goldman Sachs analyst Gabriela Borges reiterated a Buy rating and raised the firm’s 12-month price target to $278 from $216, citing two forces compounding at once.
“Put simply, we believe that these two dynamics together are accelerating Snowflake’s pace of market share gain.”
Borges pointed to the spread of AI coding tools making it easier for customers to migrate off legacy data platforms, combined with Snowflake’s own Cortex Code launch, as the engine behind the upgrade.
Goldman Sachs described adoption as "the fastest of any Snowflake product" and indicated that artificial intelligence is triggering an "inflection" in growth and market-share gains for the company.
Bank of America turned even more bullish.
"That's not a flurry, that's a blizzard of demand," analysts led by Koji Ikeda wrote in a note Thursday.
The bank raised its price target from $205 to $300 while reiterating a Buy rating.
"We think the results and outlook are solid evidence supporting our long-term positive view that Snowflake is a share gainer in a large and expanding AI business intelligence opportunity," the bank said.
After years of concerns over slowing enterprise cloud spending, Thursday's reaction suggested investors may now be viewing Snowflake less as a traditional software company and more as a foundational AI infrastructure platform.
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