Key Highlights

  • SNOW shares are up 23.92% to $379.00 in pre-market trading.
  • Fiscal second-quarter Revenue rose 35% year over year to $1.55 billion, versus $1.48 billion expected, while adjusted EPS of $0.62 crushed a $0.45 consensus.
  • Product revenue accelerated to 37% growth for a third consecutive quarter.
  • Management raised full-year fiscal 2027 product revenue guidance to $6.07 billion from $5.84 billion and lifted its Operating Margin outlook.
  • Remaining performance obligations climbed 30% to $9 billion, and net revenue retention held at a strong 126%.

Shares Soar on a Blowout Quarter

Snowflake (NYSE:SNOW) shares are surging in pre-market trading, up over 20%, after a blowout fiscal second-quarter report released Wednesday evening topped Wall Street estimates across every metric. Snowflake operates the AI Data Cloud, a cloud-native platform that unifies data warehousing, data lakes, data engineering, analytics, application development, and AI and Machine Learning workloads across major public clouds including AWS, Azure, and Google Cloud Platform.

Revenue rose 35% year over year to $1.55 billion versus $1.48 billion expected, while product revenue accelerated to 37% growth for a third consecutive quarter and adjusted Earnings Per Share of $0.62 crushed a $0.45 consensus estimate.

AI-Driven Demand Fuels Raised Guidance

Management raised full-year fiscal 2027 product revenue guidance to $6.07 billion from a prior $5.84 billion and lifted its operating margin outlook, citing accelerating AI-driven demand for its Cortex AI and Native App Framework offerings. Remaining performance obligations climbed 30% year over year to $9 billion, and net revenue retention held at a strong 126%, underscoring continued expansion within Snowflake's existing customer base.

Analysts Rush to Raise Price Targets

The results triggered a wave of bullish analyst reactions, with BTIG and Needham raising their price targets to $424 and $450, respectively. The report also drove sympathetic gains in peers like Datadog, as investors reassess concerns about AI disrupting traditional SaaS Business models following a period in which software stocks had broadly underperformed amid rising bond yields and rate-hike fears.

A Potential Turning Point for Software Sentiment

Snowflake's blowout quarter is helping reset the narrative around AI's impact on software companies, showing that AI adoption can serve as a tailwind rather than solely a disruptive threat for well-positioned data platforms. Continued execution on Cortex AI adoption and progress toward the raised full-year targets will likely remain the key catalysts for the stock going forward.