Snowflake lifts annual revenue forecast on cloud and AI demand, shares soar

Snowflake announced on Wednesday that it surpassed Wall Street's estimates for quarterly results and revised its full-year product revenue forecast upward, as demand for its cloud data platform and AI offerings grows. The company's shares jumped over 20% in extended trading following the news.

Snowflake's core cloud data-warehousing products have attracted businesses migrating their legacy systems to the cloud and integrating AI. The company's AI products contributed roughly half of the acceleration in revenue, according to CEO Sridhar Ramaswamy during a post-earnings call.

The software company's AI offerings, including its coding assistant Cortex Code and enterprise chatbot CoWork, have seen significant growth. Cortex Code's user base grew to over 9,100 accounts, with more than 2,000 new users added during the quarter. CoWork expanded its customer base to 5,800 accounts.

Snowflake now anticipates fiscal 2027 product revenue of $6.07 billion, up from its previous forecast of $5.84 billion. The company is benefiting from a wave of customers relying on its platform to enable AI capabilities, as noted by Gil Luria, a managing director at equity research firm D.A. Davidson.

Snowflake reported fiscal second-quarter product revenue of $1.49 billion, a 37% increase compared to the previous quarter. The company's overall revenue for the period was $1.55 billion, beating analysts' average estimate of $1.48 billion. Adjusted profit for the quarter stood at 62 cents per share, surpassing the estimated 45 cents per share.

Last quarter, Snowflake signed a five-year, $6 billion deal with Amazon Web Services to utilize AWS's Graviton processors and AI infrastructure.