Snowflake stock (NYSE: SNOW) investors were expecting a strong quarter, but they received something considerably better.
Shares jumped about 22% to $378.80 in Thursday premarket trading after the cloud-data company beat Wall Street estimates, accelerated product growth and raised its full-year outlook.
Snowflake reported fiscal second-quarter revenue of $1.55 billion, up 35% year on year, while product revenue climbed 37% to $1.49 billion. Adjusted earnings reached 62 cents a share, comfortably above the 45 cents analysts expected.
The bigger message was forward-looking, as AI appears to be making Snowflake grow faster rather than disrupting it.
Snowflake did more than beat as growth accelerated
Product revenue growth accelerated for a third consecutive quarter, according to management, while the $1.49 billion result came well above Snowflake’s own prior guidance.
The company added 692 net new customers, up 32% from a year earlier. Customers generating more than $1 million in trailing 12-month product revenue rose 27% to 828, while remaining performance obligations reached $9 billion.
Deutsche Bank analyst Brad Zelnick called the quarter “another outstanding set of results” in comments reported by StreetInsider.
He noted that product revenue outperformance reached 5.2%, marking the first back-to-back quarterly beats above 5% in years, and said consumption trends appear to have “further inflected.”
Deutsche Bank raised its Snowflake target to $400 from $350 and maintained a Buy rating.
AI has become a growth engine rather than disruption risk
For much of the generative-AI boom, Snowflake faced questions over whether newer AI-native platforms could weaken its position in enterprise data.
The latest quarter points in the opposite direction.
Chief executive Sridhar Ramaswamy said AI is creating a “flywheel effect” across the business. Snowflake’s CoCo product surpassed 9,100 accounts during the quarter, while CoWork expanded to 5,800 accounts.
CFO Brian Robins said stronger AI revenue contributed meaningfully to the acceleration. That supports a bullish thesis analysts had been developing before the results.
Rosenblatt analyst Blair Abernethy said Snowflake has a “significant medium-term growth opportunity” from cloud-data migration and newer AI capabilities. He expected healthy consumption growth and raised his target to $345 before the report.
The important point is that AI workloads do more than create demand for individual products.
They can increase data and computing consumption across Snowflake’s broader platform, turning AI adoption into a multiplier for its core business.
Guidance explains why the stock move is so large
Investors had already set a demanding hurdle.
Freedom Capital Markets strategist Jay Woods said before earnings that “simply beating expectations may not be enough” and said another guidance increase could be necessary to sustain the rally.
The company raised fiscal 2027 product-revenue guidance to $6.07 billion from $5.84 billion, implying 36% growth.
For the third quarter, it expects product revenue of $1.588 billion to $1.593 billion, representing growth of 37% to 38%.
Profitability improved alongside growth. Non-GAAP operating margin reached 15.3%, and Snowflake lifted its full-year margin outlook to 14.5% from 13.5%.
That combination matters because high-growth software investors rarely get faster revenue growth and expanding margins simultaneously.
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