Snowflake shares soared 14% during Thursday premarket trading after the cloud data platform beat Q2 earnings estimates and raised its revenue forecast while signalling accelerating demand for its artificial intelligence offerings.
Revenue for the quarter rose 31.8% to $1.14 billion from a year ago against an expected $1.09 billion.
For the full year, Snowflake raised its product revenue guidance to just under $4.4 billion, higher than its previous $4.33 billion outlook and marginally above analyst estimates of $4.34 billion.
The rally, if sustained, would add more than $11 billion to the company’s market capitalization, lifting it well above $78 billion.
The surge underscores investor confidence that Snowflake is firmly positioned to benefit from a corporate wave of data modernization and AI adoption.
As companies invest heavily in integrating large language models and deploying AI applications, Snowflake has emerged as one of the sector’s most sought-after players.
“We have an enormous opportunity ahead as we continue to empower every enterprise to achieve its full potential through data and AI,” Chief Executive Sridhar Ramaswamy told investors.
Quarterly results beat Wall Street expectations
The company reported a narrower loss of $298 million, or 89 cents per share, compared with a loss of $316.9 million, or 95 cents per share, a year earlier.
Adjusted earnings stood at 35 cents per share, beating analysts’ consensus forecast of 27 cents, according to FactSet.
Revenue growth remained resilient, with Snowflake’s remaining performance obligations — a measure of future contracted sales — jumping 33% year-on-year to $6.9 billion.
Executives highlighted the breadth of enterprise engagement, noting that more than 6,100 accounts are now using Snowflake’s AI-driven services on a weekly basis.
“Thousands of customers are betting their business on Snowflake,” Ramaswamy said, adding that demand for its AI products is beginning to drive incremental revenue streams beyond its traditional data warehousing services.
Guidance lifted as AI adoption accelerates
For the full year, Snowflake raised its product revenue guidance to just under $4.4 billion, higher than its previous $4.33 billion outlook and marginally above analyst estimates of $4.34 billion.
Third-quarter product revenue is projected to come in between $1.12 billion and $1.13 billion, also slightly ahead of Wall Street’s forecast of $1.12 billion.
Executives credited the upgrades to a wave of adoption across industries including financial services, retail, and healthcare.
Snowflake’s platform, they said, is increasingly used for building data pipelines, training AI models, and deploying AI-enabled applications at scale.
“That’s a catalyst for next-generation databases, whether that be MongoDB, Snowflake or Databricks,” said Richard Clode, portfolio manager at Janus Henderson Investors, which holds Snowflake stock.
Analysts raise price targets after upbeat results
The stronger-than-expected results and raised guidance triggered a flurry of analyst upgrades.
Barclays lifted its price target to $255 from $219, maintaining an overweight rating and citing robust product uptake alongside strong customer pipelines.
At least seven other brokerages followed with upward revisions.
Piper Sandler raised price target to $285/ share from $215, also maintaining an overweight rating on the stock.
Data compiled by LSEG showed Snowflake is rated “buy” on average by 51 analysts, with a median price target of $255.
The stock has already risen about 30% so far in 2025, but remains among the most expensive names in the cloud software sector.
It trades at 142 times forward earnings estimates, compared with 76 times for MongoDB and 64 times for Datadog.
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