Snowflake’s stock jumped more than 23% in after-hours trading Wednesday after the cloud data company posted better-than-expected fiscal second-quarter results and lifted its full-year product-revenue outlook, a sharp market reaction to a report that underscored how fast AI demand is reaching corporate databases. The move put fresh focus on whether the company’s AI push can keep turning customer interest into bigger spending, and whether the upgraded forecast now looks conservative or just ambitious.
The numbers gave bulls plenty to work with. Snowflake reported adjusted earnings of $0.62 a share, topping the $0.45 consensus, while total revenue came in at $1.55 billion versus the $1.48 billion expected, up 35% from a year earlier. Product revenue, the company’s closely watched growth metric, rose 37% to $1.49 billion. Management also raised full-year FY27 product-revenue guidance to $6.07 billion from $5.84 billion and increased its adjusted operating margin target to 14.5% from 13.5%.
The stock surge is being driven by a simple market storyline: companies building AI tools need clean, usable data, and Snowflake is trying to be the place where that data lives. Chief Executive Officer Sridhar Ramaswamy said, “The results demonstrate how the AI transformation that’s sweeping enterprises is compounding Snowflake’s advantage.” He also said, “More and more customers are migrating their data and data work onto Snowflake so that they have an AI-ready data foundation.”
That framing matters because Snowflake is no longer just selling a warehouse for storing and querying data. It is pitching itself as a platform where businesses prepare their information for AI workloads, which is a more strategic and potentially stickier role. Investors have spent much of the past two years asking which software names can translate AI enthusiasm into measurable revenue. Wednesday’s report gave Snowflake one of the clearer examples yet, with management saying AI products contributed “about half of the acceleration” seen.
The market clearly liked that answer. Snowflake (NYSE: SNOW) rose about 23% in after-hours trading Wednesday and more than 23% in Thursday premarket trading. Reuters, citing syndicated market data, put the premarket gain at about 24%, with the shares near $378.75. The exact move varied by source, but the message was the same: traders were rewarding both the beat and the higher outlook.
The biggest question heading into the report was whether Snowflake could justify the lofty expectations that have built around AI-linked software names. Its updated forecast helped ease that pressure. For the current quarter, Snowflake guided product revenue to $1.588 billion to $1.593 billion, above the roughly $1.50 billion consensus. That is the kind of guidance beat that often matters as much as the headline earnings number, because it signals momentum is continuing rather than fading after a good quarter.
Brian Robins, the company’s chief financial officer, called the period “our third consecutive quarter of product revenue growth acceleration,” and said the trend was “driven by strength in both our core data platform and a meaningful step-up in AI revenue.” That is an important distinction. Snowflake is not presenting AI as a side project. It is treating it as a meaningful add-on to the base business, which gives management more confidence to raise the full-year outlook and lift margin expectations at the same time.
The new FY27 product-revenue target of $6.07 billion also signals that the company believes demand is broadening rather than narrowing. For a market that has been quick to punish software companies when growth decelerates, the combination of acceleration and higher margin guidance is exactly the kind of setup investors wanted to see. It suggests Snowflake is still gaining share in a market where buyers are not just renewing contracts, but expanding their use cases.
Snowflake also pointed to traction in its AI products. The company said its AI coding agent CoCo added more than 2,000 accounts to top 9,100, while CoWork reached 5,800 accounts. Those figures do not by themselves reveal revenue, but they do show adoption moving beyond pilot-stage curiosity. For a company like Snowflake, account growth in AI tools can matter because it can deepen engagement inside existing customers and create a path for more usage over time.
That said, the company’s own language still leaves room for caution. Saying AI products contributed “about half of the acceleration” is not the same as saying AI is the only driver, or that the trend is fully insulated from macro pressure. Snowflake still has to prove that AI demand remains durable enough to support the new guidance through the rest of the year. The market is rewarding the evidence it has now, but it will want to see that momentum continue.
The next key test will come with the company’s third-quarter FY2027 report, expected around late November or early December 2026. That update will show whether the raised forecast is holding up or whether the current surge in enthusiasm has run ahead of the fundamentals. For now, the setup is straightforward: investors have a strong beat, a higher outlook and a clear AI story. They also have a stock that has already moved sharply and may need more proof to keep climbing.
Analysts are also likely to revisit their models quickly after the print. Reported target revisions have already started to reflect the better tone, with Deutsche Bank moving to $400, Jefferies to $430, BofA to $470 and Barclays to $384. Those updates suggest the sell-side sees room for more upside, but they also frame the stock around expectations that are becoming more demanding after a large post-earnings jump.
For now, Snowflake has what every software investor wants: faster growth, improving margins and a narrative that fits the market’s biggest theme. The company’s challenge is to turn one strong quarter into a repeatable pattern. Wednesday’s report says AI is helping do that. The next report will show whether the market’s enthusiasm was justified or whether this was just the latest hard-charging move in an already crowded AI trade.
