Snowflake's Stock Soars as AI Demand Fuels Strong Q2 Results and Optimistic Outlook

Snowflake shares surge as AI boom fuels demand for data platforms

Aug 28 (Reuters) - Snowflake (SNOW.N), opens new tab shares jumped about 14% on Thursday riding a wave of demand for its artificial intelligence database products, as companies race to modernize their data infrastructure and simplify AI adoption. The stock move is set to add more than $11 billion to its $67 billion market capitalization, if premarket gains hold. The cloud-based data warehousing firm, which helps enterprises store, manage and analyze massive datasets across multiple cloud providers, said demand for its platform is accelerating. Nvidia's (NVDA.O), opens new tab strong forecast boosted confidence in the AI sector and pointed to sustained spending on data infrastructure, a trend that positions Snowflake to benefit as companies accelerate efforts to modernize data stacks and deploy AI. Investors see Snowflake as a key beneficiary of the AI-driven shift to the cloud. "That's a catalyst for new next generation databases, whether that be MongoDB, whether that be Snowflake, whether that be Databricks," said Richard Clode, portfolio manager at Janus Henderson Investors, which owns Snowflake shares. The company highlighted strong momentum on Microsoft's Azure cloud service, with usage surging in Europe, the Middle East and Africa. Snowflake's stock, which is up about 30% this year, trades at 142.52 times profit estimates, while shares of rivals MongoDB (MDB.O), opens new tab and Datadog (DDOG.O), opens new tab have a price-to-earnings multiple of 75.76 and 63.71, respectively. Reporting by Akash Sriram in Bengaluru; Editing by Shailesh Kuber Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Artificial Intelligence Akash Sriram Thomson Reuters Akash reports on technology companies in the United States, electric vehicle companies, and the space industry. His reporting usually appears in the Autos & Transportation and Technology sections. He has a postgraduate degree in Conflict, Development, and Security from the University of Leeds. Akash's interests include music, football (soccer), and Formula 1.

Cloud analytics firm Snowflake lifts annual product revenue forecast; shares jump 11%

Aug 27 (Reuters) - Snowflake (SNOW.N), opens new tab raised its forecast for fiscal 2026 product revenue on Wednesday, banking on strong demand for its data analytics services, as enterprises prioritize artificial intelligence spending. Shares of the company were up 11% in extended trading. Snowflake is benefiting from the acceleration in AI software adoption and higher spending from enterprises looking to modernize data infrastructure. With more organizations beginning to explore their GenAI strategies and build GenAI-powered apps, analysts expect Snowflake to be a natural choice for customers looking to simplify AI stacks for analytics. The company expects annual product revenue of $4.40 billion, compared with its prior forecast of $4.33 billion. For the second quarter ended July 31, Snowflake posted product revenue of $1.09 billion, in line with estimates, according to data compiled by LSEG. Remaining performance obligations -- the most popular measure of booked revenue -- came in at $6.9 billion, a 33% growth from last year. Snowflake's cloud-agnostic platform enables organizations to host and manage AI models from various cloud providers in a single, centralized environment. Reporting by Juby Babu in Mexico City; Editing by Vijay Kishore Our Standards: The Thomson Reuters Trust Principles., opens new tab

Snowflake Stock Soars as AI Demand Boosts Results, Outlook

Snowflake added 48 more customers with $1 million plus product revenue from the previous quarter. Shares of Snowflake (SNOW) jumped 14% in premarket trading Thursday when the artificial intelligence (AI) data cloud provider posted better-than-anticipated results and boosted its guidance as it added more customers. The software company reported second quarter fiscal 2026 adjusted earnings per share (EPS) of $0.35 on revenue that grew 32% year-over-year to $1.14 billion. Analysts surveyed by Visible Alpha had expected $0.27 and $1.09 billion, respectively. Product revenue of $1.09 billion also topped forecasts. Net revenue retention rate was 125%, and Snowflake had 654 customers with trailing 12-month product revenue above $1 million, up from 606 in the previous quarter. CEO Sridhar Ramaswamy noted that more than 6,100 accounts are using Snowflake's AI every week, and that the company has "an enormous opportunity ahead as we continue to empower every enterprise to achieve its full potential through data and AI." Snowflake now sees full-year product revenue increasing 27% to about $4.40 billion, versus its earlier outlook of a 25% gain to roughly $4.33 billion. Entering today's session, Snowflake shares had risen 30% in 2025.

Snowflake stock surges over 18% after strong Q2 earnings and positive guidance for next quarter

SNOW stock today: Snowflake's stock surged more than 18% after it crushed Wall Street earnings expectations for its fiscal second quarter and offered strong guidance for the next, as per a report. This comes as businesses are doubling down on modernizing their company data for artificial intelligence projects, as per an IBD report. The cloud-based data storage company reported adjusted earnings of 35 cents per share, nearly double what it made a year ago, and well ahead of the 27 cents analysts were expecting, as reported by IBD. Revenue hit $1.1 billion, up 32% year over year and also slightly above forecasts of $1.09 billion, according to the report. CEO Sridhar Ramaswamy shared that over 6,100 accounts are using Snowflake's AI every week, and that the company has "an enormous opportunity ahead as we continue to empower every enterprise to achieve its full potential through data and AI," as quoted by Investopedia. William Blair analyst Jason Ader said that "The upbeat print reinforces the bull thesis around the technical moat of Snowflake's data platform -- serving both structured and unstructured data -- with new products becoming an increasingly material growth lever and driving healthy new customer acquisition," as quoted in the report. ALSO READ: AI Is wiping out entry-level roles! Check if your job is safe or at risk Investors were even more encouraged as the company's outlook for the current quarter was above analyst expectation. Snowflake projected product revenue between $1.125 billion and $1.130 billion, topping Wall Street's expectations of $1.12 billion, as per IBD. RBC Capital analyst Matthew Hedberg pointed out that Snowflake's strong quarter with product revenue of $1.091.5 billion, represents a beat of 4.9%, versus the 3.6% beat last quarter, as reported by IBD. While Citi analyst Tyler Radke highlighted that, "Snowflake exceeded high expectations delivering its strongest beat in years with reaccelerating product revenue growth to 32%," adding, "With two strong quarters, we see positive read-throughs across consumption patterns and believe the strength and migration activity suggests large enterprises' increasing budget allocation towards database modernization as part of artificial intelligence projects which likely supports further upside," as quoted by IBD. ALSO READ: Stop overpaying! The hottest iPhone deals let you score big with trade-ins and new lines The strong earings results comes as many companies are in trials with autonomous, goal-driven AI agents and Snowflake is focused on helping companies use proprietary data to deploy their own AI agents, as per the report. Snowflake is company that sells data analytics software and runs on cloud-computing platforms, the firm has evolved into a cloud data-management software provider and privately held Databricks has been Snowflake's biggest rival, according to the IBD report. Why did Snowflake's stock go up? Because the company beat both earnings and revenue expectations and issued stronger-than-expected guidance for the next quarter, as per the IBD report. What was Snowflake's revenue for Q2? Revenue hit $1.1 billion, up 32% year over year and slightly above estimates, as per the IBD report.

Snowflake's CEO Says AI Is Not 'Plateauing:' Enterprise Adoption Still In 'Very, Very Early Innings' -- Ample 'Runway' Ahead - Snowflake (NYSE:SNOW)

Snowflake Inc. SNOW CEO Sridhar Ramaswamy pushed back against the growing narrative that artificial intelligence models are beginning to plateau, calling such predictions premature and something that has ended up not being true several times in the past. SNOW stock is at important technical levels. See the complete data here. Still 'Very, Very Early Innings' During the company's second-quarter earnings call on Wednesday, Ramaswamy said, "Every prediction that we have made about various kinds of plateauing has not really turned out to be true some six odd months later," while citing "remarkable transformation" in model capabilities, particularly in code generation and agentic workflows, in recent months. According to Ramaswamy, enterprise use cases, unlike consumer-facing applications, are still unfolding. "These kinds of experiences become useful only when the data that matters to the enterprise" actually becomes available to the models. See Also: Snowflake Stock Is Moving Higher After Hours: Here's Why "Think of all the work that happens in an enterprise," Ramaswamy said. "Whether it is insurance claims processing, or regulatory reporting, or anomaly detection," he says, adding that across all these areas, the application of data and AI "is very much in its infancy." Looking ahead, he sees a long runway for value creation. "There is honestly years of work ahead in terms of the value that we can get from AI," he said. "It's still very, very early innings." Stock Rallies On Beat-And-Raise Quarter Snowflake released its second-quarter results on Wednesday, reporting $1.14 billion in revenue, up 32% year-over-year, and beating consensus estimates of $1.09 billion. The company posted a profit of $0.35 per share, ahead of estimates at $0.27. Additionally, it raised its guidance for the full-year, now expecting $4.395 billion in revenue, representing a year-over-year increase of 27%, and up from its prior guidance of $4.33 billion. Shares of Snowflake were up 3.11% on Wednesday, closing at $200.39, and are up another 14.24% in pre-market trade, following its earnings announcement. The stock is ranked high on Momentum in Benzinga's Edge Stock Rankings, with a favorable price trend in the short, medium and long terms. Click here for deeper insights into the stock. Read More: Snowflake Analyst Remains Bullish Ahead Of Q2 Earnings Release Photo courtesy: Shutterstock.com SNOWSnowflake Inc$229.6014.6%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum87.45Growth15.87QualityN/AValue7.26Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

Snowflake Stakes Its Claim: 'The Best AI Data Platform There Is' - Snowflake (NYSE:SNOW)

Snowflake, Inc. SNOW, a leader in the cloud data warehouse sector, posted second-quarter beats on the top and bottom lines while raising its full-year product revenue forecast on Thursday. SNOW stock is soaring. Watch the real-time price action here. "The Best AI Data Platform" Snowflake CEO Sridhar Ramaswamy took an assertive stance in its latest second-quarter earnings call: "Snowflake is the best AI data platform that there is. And this is widely recognized by many of our customers and new customers and we stand out in that respect," he said. Read Next: CoreWeave Stock Surges As Nvidia's AI Revenue Fires Up Ramaswamy's bold statement was backed by a record-setting financial performance and a flurry of customer and product milestones that demonstrate the company's expanding reach in the enterprise AI market. Revenue for the quarter rose 32% year-over-year to $1.09 billion, fueled by a wave of innovation and customer adoption. The CEO revealed on the call that over 6,100 accounts now use Snowflake's AI features every week and nearly half of the new customers cited AI as a major motivator. "We were very deliberate about how we brought AI to Snowflake. We wanted it to feel natural, to be a natural extension of how people access data. ... What has led to the broad adoption, to be honest, without us investing in a massive sales play," Ramaswamy said. The Future Of Snowflake The CEO highlighted Snowflake Intelligence, now in public preview, as the company's next step in enterprise AI. The platform will allow users to "talk" to their data using natural language to create actionable insights and intelligent agents. Ramaswamy painted a bright future for Snowflake in terms of customer growth as AI use cases expand. "I think there is honestly years of work ahead in terms of the value that we can get from AI. The models have advanced so much that I think just effectively using them in all of the workflows that matter to enterprises is going to create enormous value for all of us," he said. Read Next: Could Trump Target A Stake In UnitedHealth Next? Maybe ... Here's Why Photo: Shutterstock SNOWSnowflake Inc$239.1019.3%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum87.45Growth15.87QualityN/AValue7.26Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

Snowflake Analysts Raise Forecasts As Stock Jumps To 52-Week High On Strong Results - Snowflake (NYSE:SNOW)

As the demand for data-driven insights and cloud-based solutions intensifies, companies providing these services are experiencing significant growth and investor interest. Snowflake Inc. SNOW, a leader in data cloud services, is at the forefront of this trend, capturing attention with its robust financial performance and strategic innovation. Shares of Snowflake rallied in early trading on Thursday, after the company reported upbeat fiscal second-quarter results on Wednesday. Here are some analyst takeaways. Citizens JMP Securities analyst Patrick Walravens reiterated a Market Outperform rating, while raising the price target from $260 to $283. KeyBanc Capital Markets analyst Eric Heath maintained an Overweight rating, while lifting the price target from $250 to $275. Wedbush analyst Daniel Ives reaffirmed an Outperform rating, while taking the price target higher from $230 to $250. JPMorgan analyst Mark Murphy reiterated an Overweight rating, while raising the price target from $225 to $255. Rosenblatt Securities analyst Blair Abernethy maintained a Buy rating, while lifting the price target from $210 to $250. Goldman Sachs analyst Kash Rangan reaffirmed a Buy rating, while taking the price target higher from $230 to $260. Needham analyst Mike Cikos reiterated a Buy rating, while raising the price target from $230 to $280. Cantor Fitzgerald analyst Thomas Blakey reaffirmed an Overweight rating, while lifting the price target from $242 to $275. BofA Securities analyst Brad Sills maintained a Buy rating, while raising the price target from $240 to $280. Check out other analyst stock ratings. Citizens JMP Securities: Snowflake reported strong quarterly results, with non-GAAP earnings of 35 cents per share, topping consensus of 27 cents per share, Walravens said in a note. The company's total revenues climbed 32% year-on-year to $1.14 billion, surpassing consensus of $1.09 billion, with product revenues of $1.09 billion beating expectations by around $52 million, he added. Total remaining performance obligations (RPO) of $6.93 billion grew 33% year-on-year and 34% sequentially, the analyst stated. "Snowflake addresses a huge opportunity that is expected to more than double to $355B in 2029, from $170B in 2024," he further wrote. KeyBanc Capital Markets: Snowflake's results highlighted "continued strength in core analytics as well as outperformance across all new products," Heath said. Crunchy contributed more than $5 million in the quarter, he added. Net recurring revenues (NRR) rose 1 percentage point to 125%, driven by "migration activity among large existing customers," the analyst stated. "We continue to see Snowflake benefiting its data gravity, a strong pace of product innovation - expanding beyond core data warehouse, and enterprise's focus on a combined data and AI strategy," he further wrote. Wedbush: After reporting a quarterly beat, Snowflake raised its product revenue guidance for fiscal 2026 to around $4.395 billion, reflecting about 27% year-on-year growth, from its prior outlook of $4.350 billion, representing 25% growth, Ives said. The company "looks to drive further innovation across all parts of the business with data modernization for AI integrations still in the early innings of playing out in the space," he added. Management raised their full-year operating margin guidance to around 9.0%, higher than Street expectations of 8.3%, the analyst stated. The company has the ability to "capitalize on the AI Revolution over the next 12-18 months as the company is well-positioned to benefit from the significant acceleration of AI use cases," he further wrote. JPMorgan: Snowflake's quarterly product revenue growth of 31.5% year-on-year significantly exceeded Street expectations, Murphy said. Sequential product revenue growth of 9.4% was the highest since the third quarter of 2023, he added. Dollar-based net revenue retention (DBNR) rose to 125% in the fiscal second quarter, which was the first time it has improved since more than three years ago in the fourth quarter of 2022, the analyst stated. "Overall, we are impressed with what is in our view a noticeably resurgent quarter as Snowflake takes its place among the small list of scaled public software companies capable of nudging growth above 30% in the current environment," he further wrote. Rosenblatt Securities: While the core Snowflake offering remains the main driver of revenue performance, the company's "much improved product development release cadence since year is clearly resonating with its existing customers," Abernethy said. The revenue outperformance in the second quarter was mainly driven by the faster-than-expected migration of workloads by large existing customers, the analyst stated. The Crunchy Data acquisition in June "added marginally to revenue in Q2," he further wrote. Goldman Sachs: Snowflake reported its quarterly results "significantly" stronger than expected, Rangan said. The results not only reflected stabilization but also acceleration in product revenue growth, cRPO and NRR, he added. The company hit a record high of net adds of customers with contracts higher than $1 million, the analyst stated. These results increase confidence in Snowflake's ability to scale revenues to over $10 billion, he stated. Needham: The acceleration in product revenue growth reflects "the large market opportunity and continued runway Snowflake has in core Analytics,"Cikos said in note. The company reported that 6,100 customers were using its AI/ML features on a weekly basis, up from around 5,200 in the prior quarter, the analyst stated. "We view large customer adoption as a leading indicator for Revenue," he further wrote. Cantor Fitzgerald: The second-quarter revenue beat was the largest in absolute dollars as a public company, Blakey said. The beat, of $50 million was 4.9% above the high end of the guidance range, he added. The strength was driven by Snowpark and AI/ML workloads, the analyst stated. "Management noted that it has made progress towards finding a new CFO to back-fill Mike Scarpeli," he further wrote. BofA Securities: Snowflake reported "impressive" results, which were driven by momentum in the core analytics market as well as the company" "improved competitive position," Sill said. The 18% growth in new customer adds was likely driven by the "growing perception of Snowflake as a data platform for multiple types of workloads across analytics, data science, collaboration and AI," the analyst stated. "We think this bodes well for larger expansion deals, as customers are starting with analytics, but plan to add other workloads addressing very large and growing addressable markets," he further wrote. SNOW Price Action: Snowflake shares were up 18.66% at $237.78 at the time of publication on Thursday, up 50.93% since the start of the year. The stock is trading at a new 52-week high, according to Benzinga Pro data. Read More: Snowflake's CEO Says AI Is Not 'Plateauing:' Enterprise Adoption Still In 'Very, Very Early Innings' -- Ample 'Runway' Ahead Photo: Grand Warszawski / Shutterstock.com SNOWSnowflake Inc$237.7918.7%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum87.45Growth15.87QualityN/AValue7.26Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

Snowflake Q2 Beats Estimates On AI Momentum, Shares Jump - Snowflake (NYSE:SNOW)

Snowflake Inc SNOW reported financial results for the second quarter on Wednesday after the close. Here's a look at the key details from the quarter. SNOW is charging ahead with explosive momentum. See the market dynamics here. Q2 Highlights: Snowflake reported second-quarter revenue of $1.14 billion, beating analyst estimates of $1.09 billion, according to Benzinga Pro. The AI data cloud company reported second-quarter adjusted earnings of 35 cents per share, beating analyst estimates of 27 cents per share. Total revenue was up 32% year-over-year. Product revenue came in at $1.09 billion, also up 32% year-over-year. Net revenue retention rate was 125% in the quarter. Remaining performance obligations totaled $6.9 billion, up 33% year-over-year. Snowflake said it ended the quarter with 654 customers with trailing 12-month product revenue greater than $1 million. The company also had approximately $1.88 billion in cash and cash equivalents at quarter's end. "Thousands of customers are betting their business on Snowflake and more than 6,100 accounts are using Snowflake's AI every week," said Sridhar Ramaswamy, CEO of Snowflake. "Customers love that our platform is easy to use, connected to enable fluid access to data wherever it sits, and trusted by companies of all sizes and industries. We have an enormous opportunity ahead as we continue to empower every enterprise to achieve its full potential through data and AI." What's Next: Snowflake expects third-quarter product revenue in the range of $1.125 billion to $1.13 billion, up approximately 25.5% year-over-year. The company now anticipates full-year product revenue of $4.395 billion -- representing 27% year-over-year growth -- up from prior guidance of $4.33 billion. Snowflake's management team will further discuss the quarter on an earnings call with investors and analysts at 5 p.m. ET. A link to the call has been provided below. SNOW Price Action: Snowflake shares were up approximately 11.13% in after-hours, trading at $222.28 at the time of publication on Wednesday, according to Benzinga Pro. Read Next: MongoDB Scores Best Day Ever After Earnings Beat -- Here's What Wall Street Thinks Image: Tada Images/Shutterstock.com SNOWSnowflake Inc$225.8916.2%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum86.77Growth15.85QualityN/AValue6.87Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

Snowflake Goes On Hiring Spree Even As Other Firms Brace For Tariff-Induced Slowdown: Adds More Sales Staff In 6 Months Than Prior 2 Years - Snowflake (NYSE:SNOW)

In a market anxious about the impact of rising U.S. tariffs on corporate profits, cloud data giant Snowflake Inc. SNOW delivered a blowout second-quarter earnings report on Wednesday, raising its full-year forecast and revealing an aggressive hiring spree that signals strong confidence in future growth. Check out SNOW's stock price over here. Snowflake Hires More In 6 Months Than In Last Two Years The strong results and bullish outlook stand in stark contrast to the broader uncertainty faced by many S&P 500 firms, a sentiment captured in a pre-earnings season Goldman Sachs analysis that noted clients were "keenly focused on who will ultimately shoulder the cost of tariffs." Snowflake, however, is firmly in investment mode. Chief Financial Officer Mike Scarpelli revealed the company has hired more sales and marketing staff in the first six months of this year than in the prior two years combined. This push is fueled by accelerating adoption of the company's artificial intelligence capabilities, which management said influenced nearly half of all new customer wins in the quarter. Snowflake Touts Microsoft Azure As 'Fastest-Growing Cloud' "Our core business analytics continues to be strong. It's the foundation of the company," said CEO Sridhar Ramaswamy on the call, emphasizing that the company's new AI tools are delivering "enormous value" on top of that foundation. Buoyed by the strong momentum, Snowflake raised its fiscal 2026 product revenue guidance to $4.395 billion. The company's outperformance was broad-based, with particular strength seen in its partnership with Microsoft Corp. MSFT. "Azure was our fastest-growing cloud. It actually grew 40% year over year," Scarpelli noted. See Also: Snowflake Q2 Earnings: Revenue, EPS Beat Estimates On Continued AI Momentum, Shares Surge SNOW Adds 533 New Customers In Q2 The company's healthy expansion within its existing customer base was reflected in its 125% net revenue retention rate. Snowflake added 533 net new customers during the quarter, including a record 50 who crossed the $1 million annual revenue threshold, demonstrating significant momentum in a cautious economic environment. Snowflake Q2 Earnings Snapshot Its second-quarter revenue of $1.14 billion beat analyst estimates of $1.09 billion. The adjusted earnings of 35 cents per share beat analyst estimates of 27 cents per share. The company reported product revenue of $1.09 billion for the quarter ending July 31, a 32% year-over-year jump that marked an acceleration from the previous quarter. Snowflake expects third-quarter product revenue in the range of $1.125 billion to $1.13 billion, up approximately 25.5% year-over-year. Price Action Snowflake's shares closed 3.11% higher on Wednesday and jumped 13.19% after hours. It was up 27.22% year-to-date and 79.63% over the year. Benzinga's Edge Stock Rankings indicate that SNOW maintains a stronger price trend in the medium and long terms but a weaker trend in the short term. However, the stock scores poorly on value and growth rankings. Additional performance details are available here. The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, rose on Wednesday. The SPY was up 0.23% at $646.63, while the QQQ also advanced 0.15% to $573.49, according to Benzinga Pro data. On Thursday, the futures of the S&P 500, Dow Jones, and Nasdaq 100 indices were trading in a mixed manner. Read Next: Snowflake Reports Financial Results for the Second Quarter of Fiscal 2026 Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo courtesy: Shutterstock SNOWSnowflake Inc$226.8316.7%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum86.77Growth15.85QualityN/AValue6.87Price TrendShortMediumLongOverviewMSFTMicrosoft Corp$506.200.83%QQQInvesco QQQ Trust, Series 1$570.81-0.31%SPYSPDR S&P 500$644.82-0.05%Market News and Data brought to you by Benzinga APIs

Is Snowflake Stock a Buy Now? The Answer Might Surprise You. | The Motley Fool

Snowflake stock soared by 20% after it reported its latest quarterly financial results, but there are some risks investors need to consider. Large organizations tend to use multiple cloud computing platforms like Microsoft Azure and Amazon Web Services to manage their day-to-day operations. This leads to fragmented data, meaning valuable information which is stored on one platform isn't easily accessible on another, making it difficult to analyze. Snowflake (SNOW -0.96%) created the Data Cloud to solve that problem. It sits on top of other cloud platforms and enables businesses to bring all of their data together in one place, where it can be analyzed more effectively to extract actionable insights. This also places Snowflake in a fantastic position in the artificial intelligence (AI) race, because businesses need easy access to all of their data to develop the best models. Snowflake recently released its financial results for its fiscal 2026 second quarter (ended July 31), and a combination of accelerating revenue growth and a record order backlog sent its stock soaring by 20% in the aftermath. Should investors chase the rally, or wait for a better entry point? Snowflake launched a new platform called Cortex AI in 2023, which provides businesses with access to ready-made large language models (LLMs) from the industry's top developers, including OpenAI's latest GPT-5. Businesses can plug their internal data into these models via Cortex, in order to develop AI software. The platform also offers several tools to make data gathering easier. For example, Document AI can extract data from unstructured sources like contracts and invoices so it can be used to train models. Then there are Cortex Agents, which can be trained to autonomously complete different tasks -- for instance, an agent can be trained to analyze transcripts of conversations between salespeople and customers to identify opportunities to generate more revenue. Snowflake has another AI platform in public preview (testing) right now called Snowflake Intelligence. It allows businesses to "talk" to their data using natural language rather than programming language, which is a game changer because it means even non-technical employees can rapidly parse mountains of information to unlock valuable insights. Snowflake had 12,062 total customers at the end of the fiscal 2026 second quarter, and more than 6,100 of them are using at least one of the company's AI products every week. Snowflake generated $1.09 billion in product revenue during the second quarter, comfortably beating management's guidance of $1.04 billion. It was a 32% increase from the year-ago period, which marked an acceleration from the 26% growth the company delivered in the first quarter. Snowflake's revenue growth had been decelerating each quarter for the last couple of years, so this was a welcome change. The company's net revenue retention rate ticked higher sequentially, which contributed to the strong result. It came in at 125%, which meant customers were spending 25% more money than they were at the same time last year, so some of the cloud giant's investments in new AI products is paying off. Snowflake's remaining performance obligations (RPOs) also jumped 33% year over year to a record high of $6.9 billion. RPOs are like an order backlog reflecting customers' planned future spending, so they are a good indicator of demand. But it wasn't all good news in Q2, because Snowflake continued to lose truckloads of money. It burned $298 million at the bottom line on a GAAP (generally accepted accounting principles) basis during the quarter, and while that was a modest improvement from its year-ago net loss, it carried the company's total net loss for the first half of fiscal 2026 to a record $728 million. That puts Snowflake on track to exceed its $1.3 billion loss from fiscal 2025. The Q2 situation looked much better on a non-GAAP basis, because it excluded the whopping $436 million worth of stock-based compensation that went to employees. The company was profitable to the tune of $129 million by that measure during the quarter, more than doubling its year-ago result. But investors shouldn't ignore stock-based compensation, because despite being a non-cash expense, it dilutes the holdings of existing shareholders, which can dent their potential returns. Valuation might be the biggest reason to be cautious about Snowflake stock right now. It's trading at a price-to-sales (P/S) ratio of 20.8, which is not only a one-year high, but it makes Snowflake significantly more expensive than each of the major cloud providers: Microsoft, Amazon, and Alphabet operate several other businesses beyond the cloud, so they aren't the perfect comparisons to Snowflake. However, 20 times sales is expensive for almost any stock, except maybe a premium AI name like Nvidia, which has more than tripled its quarterly revenue since the AI revolution started gathering momentum around two years ago. Therefore, despite the strength of Snowflake's business right now, its valuation might be a barrier to further upside in the near term. Investors who buy the stock today can still do well, but they might have to commit to a holding period of five years or more to maximize their chances of earning a positive return.

Snowflake Shares Soar on Strong AI Growth. Is It Too Late to Buy the Stock? | The Motley Fool

Snowflake (SNOW -0.96%) continues to flip the narrative about the impact artificial intelligence (AI) will have on its business, turning in yet another strong earnings report. The stock is now up nearly 60% on the year, as of this writing. It was the second straight time the stock has surged following earnings this year. Snowflake operates as a cloud-based data platform built around warehousing and analytics. Customers use its solutions to store and process massive data sets, with its architecture separating storage from compute and running seamlessly across multiple cloud providers. This flexibility makes it easy for users to share data securely and in real time. There has been some worry that AI could pose a threat, given that Snowflake is strongest with structured data, while AI is built to make sense of unstructured data. However, that line of thought might not actually be the case, as it appears that AI may actually work best when working with clean, organized data. The company's Cortex AI platform, meanwhile, allows customers to build AI applications directly from their data within Snowflake's secure environment. It has been a hit with customers and has been helping to drive its strong growth. After seeing 26% year-over-year revenue growth in the first quarter, Snowflake followed it up in Q2 with revenue surging 32% to $1.14 billion. That topped the $1.09 billion analyst consensus, as compiled by Visible Alpha. Product revenue also climbed 32% to $1.09 million. Adjusted earnings per share (EPS) increased to $0.35 from $0.18 a year ago, which easily bested the $0.27 consensus. Its net revenue retention rate came in at 125% over the past 12 months, which was higher than the 124% it reported in Q1. Any number above 100% means that the company is seeing its existing customer usage expand after taking into account any customer churn. New AI products helped drive this growth. Snowflake is also adding new customers. In the quarter, it brought on 533 net new customers, including 15 Global 2000 companies. It also continues to expand more into Europe and Asia-Pacific. The company generated adjusted free cash flow of $67.8 million in the quarter. It expects strong free cash flow in the second half of the year. It ended the quarter with $4.6 billion in cash and investments and $2.3 billion in debt. Looking ahead, Snowflake upped its forecast for full-year product revenue to approximately $4.395 billion, up from a prior outlook of $4.325 billion. The new guidance represents year-over-year growth of 27%. It's projecting adjusted operating margins of 9%. For fiscal Q3, it guided for product revenue of between $1.125 billion to $1.13 billion, representing growth of between 25% to 26%. It's looking for adjusted operating margins of 9%. Following yet another great quarter, Snowflake should be ready to put the worries about the impact of AI on its business to rest. AI is not hurting it; in fact, its been a revenue growth driver. Meanwhile, the company continues to innovate through the addition of other AI products. This includes Snowflake Intelligence, where through natural language prompts, users can turn their structured and unstructured data into actionable insights or even help create AI agents. The company is seeing both strong expansion within its existing customers, as well as adding new ones. As a software-as-a-service (SaaS) company with high gross margins and highly visible recurring revenue, this is a very attractive business. Looking at valuation, the stock trades at a forward price-to-sales (P/S) multiple of nearly 18 times this fiscal year's analyst estimates. The company is showing strong growth, but that valuation is getting a bit hefty after its latest surge in price. As such, I would not chase the stock at these levels.

Meet the Monster Stock That's Crushing Nvidia on the Market | The Motley Fool

This data cloud company has delivered remarkable returns to investors in the past year, and it still has room for more upside. All eyes were on Nvidia on Aug. 27 in anticipation of the semiconductor giant's latest quarterly report, but it looks like investors were not impressed with the chip designer's results. Though Nvidia coasted past Wall Street's expectations and delivered a healthy year-over-year increase in both revenue and earnings, concerns about the company's business in China weighed on the stock. As a result, the stock remained almost flat the following day. However, there's another artificial intelligence (AI) company that released its results on the same day, and its stock soared impressively. In fact, this stock has outpaced Nvidia stock significantly in the past year. Let's take a closer look at that name and why it has the potential to fly even higher. Snowflake (SNOW -0.96%) operates a cloud-based data platform on which customers can securely store data for processing and analysis. Its data cloud platform is available on leading cloud computing platforms such as Amazon Web Services, Microsoft Azure, and Google Cloud. Moreover, Snowflake also operates a marketplace on which its customers can get access to applications and data shared by other customers. The company has been offering AI tools to its customers so they can get more out of their data, and this strategy has been paying off nicely in recent quarters. So, it wasn't surprising to see Snowflake exceeding Wall Street's expectations when it released its fiscal 2026 second-quarter results (for the three months ended July 31). The company's revenue shot up 32% year over year to $1.1 billion last quarter, an acceleration of three percentage points from the year-ago period. The rapidly improving adoption of Snowflake's AI solutions is playing a key role in driving this acceleration. The company's customer base was up by 19% year over year in the previous quarter, and just over half of its customer accounts were using Snowflake AI solutions. The company's AI platform helps customers build AI agents for analyzing documents, develop and deploy AI models and applications, and access popular large language models (LLMs) that they can apply to their data. Snowflake management made it clear on the latest earnings conference call that AI is indeed the reason why its customer base is swelling. In the words of CEO Sridhar Ramaswamy, "Today, AI is a core reason why customers are choosing Snowflake, influencing nearly 50% of new logos won in Q2. And once they're on our platform, AI becomes a cornerstone of their strategy, powering 25% of all deployed use cases with over 6,100 accounts using Snowflake's AI every week." Even better, AI is helping Snowflake drive stronger spending from its existing customer base. This is evident from the company's net revenue retention rate of 125% last quarter, a metric that compares the spending by its customers in a period to the spending by the same customer cohort in the previous year. A reading of more than 100% means that its existing customers have expanded their usage of Snowflake's solutions or are buying more of its offerings. The growth in Snowflake's customer base and the expansion in spending by existing customers led to an impressive year-over-year growth of six percentage points in its non-GAAP (adjusted) operating margin. As a result, Snowflake's adjusted earnings almost doubled from the year-ago period to $0.35 per share. What's more, the company's solid revenue pipeline and huge addressable market indicate that it can continue to deliver more upside. Shares of Snowflake have jumped 108% in the past year, well ahead of the 40% gains clocked by Nvidia during the same period. Looking ahead, Snowflake has room for further growth considering that its remaining performance obligations (RPO) jumped by 33% in the previous quarter to $6.9 billion. Not surprisingly, the company has now raised its fiscal 2026 product revenue forecast to $4.4 billion from the earlier estimate of $4.33 billion. Snowflake could further raise its forecast as the year progresses since it is sitting on a sizable revenue opportunity, which could jump higher in the future thanks to the proliferation of AI. The company expects its total addressable market (TAM) to more than double in the next five years to $355 billion in 2029, suggesting that the company is on track to enjoy years of terrific growth. Another thing worth noting is that Snowflake's earnings increased at a faster pace than the 54% year-over-year growth reported by Nvidia last quarter. Analysts are expecting it to keep outpacing Nvidia's earnings growth in the future as well. So, don't be surprised to see Snowflake stock deliver more gains to investors in the long run. And with the stock trading at 19 times sales as compared to Nvidia's price-to-sales ratio of 30, growth investors can still consider buying Snowflake even after the healthy gains it has clocked in the past year.

Snowflake shares surge as AI boom fuels demand for data platforms

(Reuters) -Snowflake shares jumped about 14% on Thursday riding a wave of demand for its artificial intelligence database products, as companies race to modernize their data infrastructure and simplify AI adoption. The stock move is set to add more than $11 billion to its $67 billion market capitalization, if premarket gains hold. The cloud-based data warehousing firm, which helps enterprises store, manage and analyze massive datasets across multiple cloud providers, said demand for its platform is accelerating. Nvidia's strong forecast boosted confidence in the AI sector and pointed to sustained spending on data infrastructure, a trend that positions Snowflake to benefit as companies accelerate efforts to modernize data stacks and deploy AI. Investors see Snowflake as a key beneficiary of the AI-driven shift to the cloud. "That's a catalyst for new next generation databases, whether that be MongoDB, whether that be Snowflake, whether that be Databricks," said Richard Clode, portfolio manager at Janus Henderson Investors, which owns Snowflake shares. The company highlighted strong momentum on Microsoft's Azure cloud service, with usage surging in Europe, the Middle East and Africa. Snowflake's stock, which is up about 30% this year, trades at 142.52 times profit estimates, while shares of rivals MongoDB and Datadog have a price-to-earnings multiple of 75.76 and 63.71, respectively. (Reporting by Akash Sriram in Bengaluru; Editing by Shailesh Kuber)

Snowflake benefiting from the rise of AI and raises forecasts

On Wednesday Snowflake announced that it is raising its revenue forecast for fiscal year 2026, citing strong demand for its data analytics services amid growing investment in artificial intelligence. The company is now targeting $4.40bn in annual product revenue, up from $4.33bn previously. The announcement sent the stock up 13% in after-hours trading. In Q2 ended July 31, Snowflake reported product revenue of $1.09bn, in line with analysts' expectations compiled by LSEG. Its remaining performance commitments, a key indicator of future revenue already booked, reached $6.9bn, up 33% y-o-y. These figures confirm the strength of its customer base and increased revenue visibility. The group is benefiting from the accelerated adoption of generative AI, which is driving companies to modernize their data infrastructures and centralize their models in secure environments. Snowflake's independent platform, compatible with several major clouds, enables the management and hosting of AI models from different providers, reinforcing its strategic role in a rapidly growing market.