Key takeaways:
- AI Is Becoming Snowflake’s Major Growth Engine
- Strong Q2 Results Led to a Higher FY2027 Forecast
- Investors Are Responding Strongly to the AI-Led Growth Story
Snowflake Raises Fiscal 2027 Outlook after reporting stronger-than-expected second-quarter results, with accelerating demand for artificial intelligence products helping drive higher customer spending on its cloud data platform.
The company reported $1.55 billion in revenue for the quarter ended July 31, 2026, up 35% year over year and above analysts’ expectations of about $1.48 billion. Adjusted earnings came in at 62 cents per share, compared with the 45 cents expected by Wall Street.
AI Demand Pushes Snowflake Growth Higher
Artificial intelligence is becoming an increasingly important contributor to Snowflake’s growth as enterprises invest in infrastructure capable of supporting AI workloads and applications.
Snowflake’s product revenue increased 37% year over year to $1.49 billion, marking another quarter of accelerating growth. Chief Executive Officer Sridhar Ramaswamy said AI products contributed roughly half of the recent acceleration, highlighting the growing role of AI in the company’s overall business.
The company’s newer AI offerings have also gained traction among customers. Its AI coding assistant, Cortex Code, surpassed 9,100 accounts during the quarter, while CoWork, its enterprise-focused AI assistant, reached approximately 5,800 accounts. The expanding adoption indicates that customers are increasingly using Snowflake not only to store and analyze data but also to build and operate AI-powered applications.
Customer expansion remained another source of momentum. Snowflake added 692 net new customers during the quarter, while the number of customers generating more than $1 million in trailing 12-month product revenue rose 27% year over year to 828. Remaining performance obligations reached $9 billion, a 30% increase from the previous year, pointing to continued demand for the company’s services.
The company has also strengthened its infrastructure position through its relationship with Amazon Web Services. Snowflake recently entered a five-year agreement worth $6 billion with AWS, giving it access to additional cloud and AI computing infrastructure as demand for AI workloads expands.
Higher Revenue Forecast Signals Continued Confidence
Snowflake’s strong quarterly performance prompted management to increase its expectations for the remainder of fiscal 2027. Snowflake Raises Fiscal 2027 Outlook as stronger-than-expected results and rising AI demand give the company greater confidence in its growth prospects.
The company now expects full-year product revenue of $6.07 billion, compared with its previous forecast of $5.84 billion. The revised outlook represents approximately 36% year-over-year growth, reinforcing management’s confidence that demand for its data and AI platform will remain strong. The Snowflake Raises Fiscal 2027 Outlook update reflects the company’s stronger revenue expectations and continued momentum from AI-related workloads.
For the third quarter, Snowflake expects product revenue between $1.588 billion and $1.593 billion, representing growth of roughly 37% to 38% from the same period a year earlier. The company also raised its full-year non-GAAP operating margin forecast to 14.5%, compared with its previous projection of 13.5%. With Snowflake Raises Fiscal 2027 Outlook now supported by higher revenue and margin forecasts, investors are watching closely to see whether the company’s AI-driven growth continues through the remainder of the fiscal year.Investors responded sharply to the results. Snowflake shares jumped more than 20% in extended trading following the earnings announcement, reflecting investor optimism around the stronger outlook and the company’s growing exposure to enterprise AI spending.
The results position AI as an increasingly significant growth engine for Snowflake while its core cloud data business continues to expand. As companies seek to integrate proprietary data with AI models and applications, Snowflake is betting that demand for the infrastructure supporting those workloads will continue to translate into higher consumption of its platform.
For the company, the latest quarter provides evidence that its shift toward AI is gaining commercial traction. The raised revenue forecast and stronger margins also suggest Snowflake expects that momentum to continue through the rest of fiscal 2027.
Sources:
https://www.cnbc.com/2026/09/02/snowflake-snow-q2-earnings-report-2027.html
