Snowflake Just Made AI Look Like a Growth Engine, Not a Software Killer
Snowflake just forced software bears to rewrite the AI slide deck overnight.
Shares of Snowflake (SNOW) ripped higher after the cloud data company posted fiscal second-quarter revenue of about $1.55 billion, up roughly 35% year over year, and adjusted earnings of $0.62 a share against a Street call near $0.45. Product revenue climbed about 37% to roughly $1.49 billion. That is the third straight quarter of product growth speeding up, not slowing down.
The stock jumped more than 20% on the session and traded near multi-year highs. Software peers like ServiceNow, Salesforce, and Adobe caught a ride on the same tape.
AI is not hollowing out the data warehouse
CEO Sridhar Ramaswamy said AI offerings drove about half of the growth acceleration. CoCo, the coding agent, cleared more than 9,100 accounts after adding over 2,000 in the quarter. CoWork, the agentic workplace product, reached about 5,800 accounts. Customers generating more than $1 million in trailing product revenue rose 27% to 828.
Remaining performance obligations hit about $9 billion, up roughly 30%. Net revenue retention held near 126%. Management raised full-year product revenue guidance to about $6.07 billion from $5.84 billion and lifted the adjusted operating margin target to 14.5% from 13.5%.
What still has to stick
A one-day twenty-point move on a high-multiple software name prices in a lot of perfection. Stock-based compensation is still a big GAAP bridge. Bears will keep asking whether AI usage turns into durable seat expansion after the headline fade.
As for me, I care less about the one-day gap and more about whether enterprises keep wiring Snowflake into the AI stack because the data already lives there. That is American software doing real work for real companies, not a slide about disruption for its own sake.
Bottom line: Snowflake just showed AI can speed a data platform instead of replace it, and the lasting trade depends on product growth staying hot after the celebration cools.
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