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Snowflake Boosts Annual Revenue Forecast on AI Demand, Shares Surge
Snowflake Inc. raised its full-year product revenue forecast, signaling strong confidence in sustained demand for its cloud data and artificial intelligence services, which sent its shares surging more than 20% in extended trading on Wednesday.
Upgraded Outlook and Q2 Beat
The company now expects its product revenue for fiscal 2027 to reach $6.07 billion, an increase from its previous forecast of $5.84 billion. The revised guidance followed a strong second-quarter performance that exceeded Wall Street estimates.
Key second-quarter financial results include:
- Product Revenue: Rose 37% year-over-year to $1.49 billion.
- Total Revenue: Reached $1.55 billion, surpassing the average analyst estimate of $1.48 billion, according to LSEG data.
- Adjusted Profit: Came in at 62 cents per share, significantly above the consensus estimate of 45 cents per share.
AdAI and Cloud Demand Fueling Growth
Snowflake's performance is being driven by robust demand for its core cloud data-warehousing platform as businesses continue to migrate from legacy systems. The growing adoption of artificial intelligence is also a key tailwind, as companies use Snowflake's platform to store and analyze the vast amounts of information needed to build AI applications.
Management has highlighted the role of its AI offerings, such as the coding assistant Cortex Code and the enterprise chatbot CoWork, in attracting customers. The company's strategic partnerships are also expanding its capabilities, underscored by a recent five-year, $6 billion deal with Amazon Web Services to utilize AWS's Graviton processors and AI infrastructure.
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