The Ace of Swords points straight up - indicating perception - and pierces the crown of the material world. Wisdom leads us beyond illusions and limitations to the spiritual truth contained in life.
As with the other three aces, (Wands, Cups, and Pentacles), the symbol is held by a hand emerging from a cloud, indicating that the wisdom and perception it represents is a gift from above.
The mountains in the background stand for abstract truth, independent of personal viewpoint and experience. The Ace of Swords takes us beyond immediate experience to the realm of spirit where intuition takes over from the airy intellect, and knowledge becomes wisdom and understanding.
On a lower level, the Ace of Swords can also signify extreme emotional force (notice the tight grip on the sword). Anger or extreme desire can allow us to experience life intensely, and the release of such energy can help us understand and cut through our illusions and problems.
Reversed: the grip fails, bringing illusion and confusion. Emotion triumphs over intellect. Violent feelings overcome benevolent ones. Problems are exaggerated, and we have to "get a grip" and try to find a balanced sense of reality.