The core highlight of Snowflake’s (SNOW) quarterly earnings lies in the strong adoption of its AI coding agent CoCo and its significant pull on product revenue growth. This product not only achieved record-breaking user penetration speed but also drove both the magnitude of revenue beat and sequential dollar growth to historic highs. At the same time, management demonstrated operating margins exceeding guidance amid rapid growth, validating the ability to unlock operating leverage. Wall Street institutions generally believe that incremental consumption driven by model selection demand and the conservative room reserved by management in full-year guidance provide the potential for further upside in subsequent results, forming the core logic behind this round of collective price target upgrades.
After posting fiscal 2027 second-quarter results that far exceeded expectations, cloud data platform Snowflake’s stock surged more than 16% on Thursday, prompting multiple Wall Street firms to raise their price targets in tandem. The earnings report showed that product revenue growth accelerated for the third consecutive quarter, operating margins reached an all-time high, and AI coding agent CoCo became the core force driving this beat.
Jefferies analyst Brent Thill noted in a report that CoCo has become Snowflake’s killer AI capability, driving product revenue to beat expectations by more than 5% for the second consecutive quarter. Third-quarter product revenue growth is expected to reach 37% to 38%, and the full-year fiscal 2027 guidance was raised by 5 percentage points to 36%, both significantly exceeding market expectations. Notably, just two quarters after its general release, CoCo has already penetrated over 60% of the installed base, adding more than 2,000 net new accounts quarter-over-quarter, with management calling it the easiest-to-sell product in Snowflake’s history. As a data-native AI coding agent, CoCo is designed to simplify and accelerate the data development lifecycle. Jefferies maintained a “Buy” rating and raised its price target from $385 to $430.
Evercore ISI also maintained an “Outperform” rating, raising its price target from $360 to $430. Analyst Kirk Materne stated that management pointed to demand for model choice as a key driver, with the underlying impetus being cost optimization, and that Snowflake’s ability to automatically route to the best model is actually pulling incremental demand, constituting a competitive advantage rather than a headwind. Additionally, operating margins of approximately 15% significantly exceeded guidance of around 12.5%, demonstrating management’s ability to unlock operating leverage while achieving growth in the mid-30% range.
BTIG reiterated a “Buy” rating and raised its price target from $340 to $424. Analysts Gray Powell and Trevor Rambo noted that this quarter’s product revenue exceeded the midpoint of guidance by $74 million, marking the largest beat relative to guidance in the company’s history. Product revenue grew by $158 million sequentially, surpassing the $108 million record set just last quarter and marking the second consecutive quarter of record sequential dollar growth. AI is driving urgency to consolidate data onto the Snowflake platform, with CoCo and CoWork gaining broader adoption and monetization, and AI users demonstrating significantly higher consumption on the core platform.
JPMorgan reiterated an “Overweight” rating and raised its price target significantly from $285 to $426. Analyst Samik Chatterjee pointed out that fiscal 2027 product revenue guidance was raised to $6.07 billion, representing 36% year-over-year growth and exceeding consensus by approximately $213 million, with the guidance already incorporating management’s confidence that third-quarter product revenue growth will slightly accelerate from the second quarter. The raised full-year guidance implies a modest deceleration in the fourth quarter, reflecting management’s conservative stance and leaving room for further upward revisions.
Additionally, Oppenheimer raised its price target from $400 to $475, Piper Sandler from $320 to $450, Citi from $395 to $490, and Wells Fargo from $500 to $525.
