Snowflake +35%. Salesforce slips. AI picked sides — PCE picks the market.
Wednesday gave us the cleanest signal yet that the AI rally is maturing into stock-picking, not index-buying. All three major indices closed at fresh record highs. Snowflake soared ~35% after-hours on a blockbuster $6B AWS Graviton + AI infrastructure deal. Salesforce slipped AH on light Q2 guidance. And it all happens before today’s main event: the PCE inflation print — the Fed’s preferred inflation gauge — drops in a few hours.
🤖 The AI software split — Snowflake soars, Salesforce slips
After the bell Wednesday, the AI software space bifurcated dramatically:
🟢 Snowflake (SNOW): ~+35% AH
Revenue grew 33% to $1.39B (vs $1.32B est) · EPS $0.39 adj (vs $0.32 est) · guided higher adjusted operating margins. Headline catalyst: a $6B AWS Graviton + AI infrastructure deal — one of the largest commitments to Amazon’s new AI chip platform.
🔴 Salesforce (CRM): lower AH on volatile trade
Revenue $11.13B · Adj EPS $3.88 (beat the quarter). But Q2 revenue guide of $11.27B–$11.35B came in light vs the $11.36B estimate at the midpoint, with margin-discipline concerns as AI investment ramps. “A Tale of Two SaaS Companies” framing started circulating overnight.
🟢 Marvell (MRVL)
Revenue $2.418B · adj EPS $0.80 — shares rose AH on AI/data-center strength. Confirms the AI infrastructure thesis is broadening.
This is what late-cycle AI looks like — the trade isn’t dead, but it’s no longer “buy anything with AI in the name.” The market is now grading on a curve.
🏆 All three indices closed at record highs
Stronger than first appearances. Despite intraday chip pullbacks and fresh Iran rumors, all three major US indices set fresh records Wednesday:
- Dow: +0.36% → new record (led the gainers)
- S&P 500: +0.02% → new record
- Nasdaq: +0.07% → new record
The headline numbers look tepid, but the records matter. The breadth broadening we flagged last Friday is continuing into this week — value/old-economy leading while mega-cap tech digests. Leadership is rotating, not collapsing.
⚡ PCE today is the referee
Today’s release at 8:30 AM ET is the inflation print that actually drives Fed policy. The Fed targets PCE — not CPI.
Consensus expectations (roughly):
- PCE MoM: around +0.5%
- Core PCE MoM: around +0.30%
- PCE YoY: around +3.8–3.9% (after +3.5% in March)
- Core PCE YoY: around +3.3% (after +3.2% in March)
If consensus is right, April PCE will be near the highest in nearly 3 years — energy-driven, with Iran/Hormuz oil pressure feeding through. Goldman is slightly below consensus at ~+3.78% YoY.
The setup:
Hotter than consensus → confirms the bond market’s inflation panic · yields likely re-test highs · “higher for longer” hardens.
In-line → already priced in · markets keep grinding on the rotation theme.
Cooler than expected → relief rally in yields and growth stocks · meaningful dovish repricing.
Also dropping today: Q1 GDP 2nd estimate, jobless claims, durable goods, plus Dell, Costco and Best Buy earnings AH. Big data day even before PCE.
📊 Wednesday snapshot
S&P 500: +0.02% → new record 🏆
Nasdaq: +0.07% → new record 🏆
Snowflake AH: ~+35% (blockbuster + $6B AWS deal)
Salesforce AH: lower (light Q2 guide)
Marvell AH: higher (AI/data-center beat)
Iran: still moving markets intraday on every headline
🧠 Bottom line
The market is now sorting AI into winners and losers in real time. Snowflake’s AWS commitment puts it on the right side. Marvell confirms the infrastructure thesis. Salesforce’s light guide puts it on the wrong side — at least for now.
But none of that matters for the next 48 hours if today’s PCE confirms what the bond market has been screaming all month. After hot CPI and hot PPI, PCE is the third and most important leg. If it confirms, the bond panic was right. If it cools, the equity rally gets fresh legs.
AI picked its winners. Today, inflation picks the market.