Snowflake shares jumped 17% after fiscal second-quarter results beat Wall Street expectations, with CEO Sridhar Ramaswamy crediting AI for about half of the company's recent growth acceleration. The results pushed Snowflake to raise its annual product-revenue forecast and triggered a wave of price-target increases from major brokerages.
Snowflake shares jumped 17% on Sept. 3, to $356.56, after rising as much as 26% during the session. The move followed fiscal second-quarter results that beat Wall Street expectations.
Earlier this year, investors feared AI agents would replace parts of conventional software, a selloff later dubbed the "SaaSpocalypse." Snowflake was caught up in that decline. Now the company is giving Wall Street a different reason to think about AI.
Product revenue drives the rally
Snowflake's product revenue rose 37% year over year to $1.49 billion, while total revenue reached $1.55 billion. Adjusted earnings of 62 cents per share also beat the 45 cents analysts expected. The stock is now up roughly 62% in 2026.
Product sales growth has risen for three straight quarters. CEO Sridhar Ramaswamy said AI was responsible for around half of Snowflake's recent growth acceleration, turning technology once seen as a threat into a growth engine.
AI tools are gaining accounts fast
Cortex Code, Snowflake's AI coding assistant known as CoCo, gained more than 2,000 accounts during the quarter, bringing adoption to more than 9,100 accounts. Snowflake's corporate AI tool, CoWork, has topped more than 5,800 accounts.
As clients build more AI applications on Snowflake, those workloads may drive higher use of its underlying data platform. Snowflake raised its fiscal 2027 product-revenue forecast to $6.07 billion from a prior $5.84 billion, an annual growth rate of almost 36%.
Wall Street raises its targets
UBS analyst Karl Keirstead said Snowflake's results, combined with growth acceleration at Palantir and Databricks, provided "compelling evidence of strong enterprise AI adoption." Deutsche Bank raised its price target to $400 from $350 and kept its Buy rating.
At least 34 brokerages raised their price targets on Snowflake, with Wells Fargo lifting its target as high as $525. The results also boosted optimism toward the broader software industry, helping shares of ServiceNow, Salesforce, and Adobe.
Snowflake still faces stiff competition from other cloud data platforms, and it must show that fast AI adoption turns into durable revenue growth rather than just headline account numbers. But its latest quarter gives investors evidence that AI can accelerate an established software company rather than replace it.
Source: TheStreet
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