Snowflake Stock Jumps 24% on Quarterly Results: How the Cloud Giant Becomes an AI Winner

Snowflake reported quarterly results for its second fiscal quarter 2027 (ended July 31, 2026) after market close on September 2, 2026, raising total revenue by 35 percent to $1.55 billion, beating analyst estimates of $1.48 billion. The stock jumped 23.9 percent to $379.07 in pre-market trading on September 3.

Product Revenue Accelerates for Third Quarter in a Row

Core business—product revenue—grew 37 percent to $1.49 billion, marking the third consecutive quarter of accelerated growth. This result defied concerns that companies might reduce cloud spending. Adjusted earnings per share came in at $0.62, significantly above consensus of $0.45.

Operating margin—adjusted on a non-GAAP basis—expanded from 11 percent year-over-year to 15.3 percent. Net loss shrank from $298 million in the prior year to $191.7 million. Net revenue retention rate stood at 126 percent, pointing to rising customer loyalty. The number of customers with more than $1 million in annual revenue grew 27 percent to 828.

Artificial Intelligence Drives Half of Quarterly Growth

CEO Sridhar Ramaswamy explained at the analyst conference that artificial intelligence accounts for roughly half of the quarter's incremental growth. The AI coding assistant Cortex Code—internally called CoCo—reached 9,100 customer accounts, with a gain of over 2,000 accounts in the recent quarter alone. The enterprise chatbot CoWork grew in parallel to 5,800 customer accounts.

Both AI offerings are positioned as key drivers of revenue acceleration, demonstrating tangible evidence of AI monetization. The company introduced these products during the current fiscal year and quickly attracted thousands of new customers.

Guidance Sharply Raised: 36 Percent Revenue Growth Expected

Management responded with substantial raises to its full-year guidance for fiscal 2027. Expected product revenue rose from $5.84 billion to $6.07 billion. Growth guidance increased from 31 percent to 36 percent. For the third quarter, Snowflake expects product revenue between $1.588 and $1.593 billion—well above the analyst consensus of around $1.50 billion.

Adjusted operating margin is expected to rise from 13.5 percent to 14.5 percent. D.A. Davidson analyst Gil Luria pointed to expanding order volume and rising margins: Snowflake is increasingly using its existing cost base more efficiently.

One of the Largest Trading Days in Company History

In pre-market trading on September 3, 2026, the stock surged 23.9 percent to $379.07. In regular trading, it rose 19.09 percent. The stock broke through its previous 52-week high of $341.95 and has gained roughly 39 percent since the start of the year—while the S&P 500 gained about 12 percent over the same period.

The combination of earnings significantly exceeding expectations, substantial guidance raise, and tangible evidence of AI monetization led to one of the largest single-day stock moves in Snowflake's history as a public company. The broader market offered little tailwind: the S&P 500 rose 0.2 percent on September 3, while the Nasdaq gained 0.2 percent. This underscores that the stock move was driven exclusively by company-specific factors, not macroeconomic dynamics.

Analysts Raised Price Targets Ahead of Release

Several analysts had raised their price targets in the days before the release: Cantor Fitzgerald to $405, Citigroup to $395, KeyBanc to $375, and TD Cowen to $370. The results demonstrate Snowflake's successful monetization of AI products and refute concerns about a slowdown in enterprise cloud spending.

Rising margins alongside growth suggest the company is increasingly using its cost base more efficiently. Accelerated growth for the third consecutive quarter underscores demand for cloud data solutions in the context of growing AI adoption across enterprises.