Elastic (ESTC) Shares Jump 7.7% as Snowflake Fuels AI Optimism Before Earnings

Elastic (NYSE: ESTC) shares surged 7.7% on May 28, lifted by Snowflake’s results that signaled strong enterprise AI adoption, just hours ahead of Elastic’s own fiscal earnings release after market close. Snowflake’s CEO highlighted faster AI pipeline construction, a trend that benefits Elastic’s search AI platform, which provides the retrieval step at inference time. More than 2,700 Elastic Cloud customers already use its vector database, but AI penetration among large clients is only 28%, suggesting significant growth runway. Elastic has exceeded its own guidance in each of the past six quarters. The stock, down 18.9% year-to-date and trading 37.7% below its November 2025 peak of $94.47, has been sensitive to shifting narratives about AI’s impact on software. Ten days ago, shares rose 5.3% on easing fears that AI would cannibalize traditional SaaS. Snowflake’s report reinforced that AI may expand rather than replace search demand.