Cloud analytics firm Snowflake (SNOW) on Wednesday raised its fiscal 2026 product revenue forecast, fueled by robust demand for its data analytics services as enterprises increasingly prioritize investments in artificial intelligence (AI) and cloud infrastructure. Shares surged 14% in premarket trading on the news, reflecting investor optimism about the company’s ability to capitalize on the accelerating adoption of AI-driven technologies across industries.
Snowflake’s growth is being driven by the rapid expansion of Generative AI (GenAI) adoption, as organizations seek to integrate AI capabilities into analytics workflows and develop AI-powered applications. Analysts say Snowflake is well-positioned to benefit from this trend due to its cloud-agnostic platform, which allows businesses to host and manage AI models from multiple cloud providers in a single, centralized environment. This flexibility helps enterprises simplify complex AI stacks and accelerate their data-driven initiatives.
On a post-earnings call, CEO Sridhar Ramaswamy highlighted strong growth on Microsoft’s Azure cloud, which saw a 40% year-over-year acceleration, and noted an uptick in Snowflake’s business across the EMEA (Europe, Middle East, and Africa) region, particularly among large enterprise accounts. Microsoft itself recently projected a record $30 billion in capital spending for the current fiscal first quarter, reflecting the company’s surging Azure sales and growing returns on its substantial AI investments. These trends have created favorable tailwinds for Snowflake, as customers increasingly look for solutions that integrate seamlessly with major cloud providers.
Snowflake now expects annual product revenue of $4.40 billion, up from its previous guidance of $4.33 billion. For the second quarter ended July 31, the company reported product revenue of $1.09 billion, meeting analyst estimates. Its remaining performance obligations (RPO), a key metric reflecting booked revenue yet to be recognized, totaled $6.9 billion, up 33% from the prior year, highlighting strong forward visibility and continued demand for its offerings.
The company’s cloud-agnostic strategy has become a key differentiator, enabling Snowflake to support AI initiatives across AWS, Azure, and Google Cloud, while providing centralized management of datasets and AI models. This approach has made Snowflake an attractive choice for organizations developing enterprise-scale GenAI applications, particularly those seeking to reduce complexity, avoid vendor lock-in, and accelerate time-to-insight.
Investors are also encouraged by Snowflake’s positioning in the broader AI ecosystem, where the convergence of cloud computing, big data analytics, and AI tools is driving unprecedented enterprise spending. As companies continue to prioritize modernization of their data infrastructure and leverage AI to optimize business processes, Snowflake’s platform is increasingly viewed as a critical infrastructure component that supports the next wave of digital transformation.
In summary, Snowflake’s raised guidance underscores the company’s strong market positioning, growing revenue visibility, and the expanding role of AI in enterprise IT spending. With shares surging on the announcement, analysts view Snowflake as a primary beneficiary of the ongoing AI adoption wave and a central player in the evolution of cloud-based data analytics.
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