Snowflake shares surge on strong Q2 beat and AI product traction
Snowflake's fiscal Q2 2027 adjusted earnings of $0.62 per share and revenue of $1.55 billion both topped analyst expectations, with product revenue up 37% year over year. The company raised its full-year product revenue outlook to $6.07 billion and noted that its CoCo AI coding agent has attracted 9,100 accounts, driving investor optimism.
The company's net loss narrowed to $191.7 million from $297.9 million a year earlier, while product revenue grew 37% year over year. Management now expects $1.59 billion in product revenue for the fiscal third quarter, topping the $1.50 billion consensus. Full-year product revenue guidance was lifted to $6.07 billion, and the adjusted operating margin forecast expanded to 14.5% from 13.5%. CoCo, its AI coding agent, added over 2,000 accounts during the quarter, reaching 9,100 total. Shares have climbed 39% year to date versus a 12% gain for the S&P 500, and the after-hours jump could mark the fourth-largest since the company's 2020 IPO. Executives are scheduled to discuss results on a conference call at 5 p.m. ET.
This earnings beat could reinforce investor confidence in AI-driven enterprise software, potentially accelerating adoption of coding assistants like CoCo among businesses seeking efficiency gains. However, it may also heighten competitive pressure on other data and analytics vendors, and could raise expectations for sustained growth that might be hard to maintain. For customers, the momentum may signal more robust product investment, but also potential pricing shifts or lock-in effects as AI features become central.