Snowflake Surges 36% as CEO Touts AI-Era Pricing
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- Snowflake posted Q1 revenue up 33% year-over-year, the fastest pace in two years; shares surged 36% in a day and extended five-day gains past 50%
- Snowflake announced a $6 billion deal to buy Amazon's Graviton chips over five years; Amazon accounts for over 70% of how the company runs its business, making AWS its largest partner by far
- Sridhar Ramaswamy credited the company's consumption-based pricing — "We recognize revenue only when a customer actually uses Snowflake's capabilities" — and predicted seat-based vendors will scramble to justify their premiums as AI does more work per employee
- Cortex Code, Snowflake's coding agent, is in use across more than 7,100 accounts, and Snowflake Intelligence accounts more than doubled quarter-over-quarter
- Ramaswamy predicted a SaaS consolidation: fewer major off-the-shelf applications and more bespoke small-scale apps, with the company's next product bet — the "control plane" — functioning as a "cockpit of work" he likens to "the new browser"
- Salesforce, offered as a contrast case, executed a $25 billion accelerated share repurchase in one quarter while still trying to rally investors around its AI product Agentforce
Why it matters: Snowflake's 33% revenue growth and 36% share jump give entrenched, usage-priced vendors ammunition against AI-disruption fears hammering SaaS peers — but the $6 billion Graviton deal and 70%+ AWS revenue exposure show the company is now making a five-year, single-cloud bet on Amazon's custom silicon to meet that AI compute demand.
