Snowflake shares (NYSE: SNOW) are up more than 21% today, trading at $371.51, as a blowout fiscal second-quarter earnings report triggers one of the stock’s biggest single-session moves in years. The rally carries the stock to a fresh 52-week high of $384.56 and extends its year-to-date gain to 71.57%, placing Snowflake firmly at the center of the market’s ongoing debate about which enterprise software companies can genuinely monetize the AI wave rather than simply ride its sentiment.
The earnings print itself gave bulls a lot to work with. Total revenue for the fiscal second quarter came in at 1.55 billion dollars, up 35% year over year and ahead of consensus expectations. Product revenue of 1.49 billion dollars grew 37% and marked a third consecutive quarter of accelerating growth, a pattern that is rare enough in enterprise software to attract serious attention. Non-GAAP earnings per share of 0.62 dollars beat the roughly 0.45 dollar estimate by nearly 39%, and non-GAAP operating margin expanded to 15.3% from 11% a year earlier. Management then raised full-year product revenue guidance to 6.07 billion dollars, implying 36% growth, up from a prior target that implied 31%, and lifted the full-year non-GAAP operating margin target to 14.5% from 13.5%.
CEO Sridhar Ramaswamy framed the results around what he called a compounding AI flywheel. The argument is structural: customers who adopt Snowflake’s AI tools end up consuming more of the core platform, which drives incremental revenue beyond what a simple seat-count or storage model would predict. Cortex AI surpassed 9,100 accounts, the enterprise coding assistant CoCo added more than 2,000 accounts in the quarter to also reach 9,100, and the CoWork chatbot product expanded to 5,800 accounts.
Management said AI platform offerings accounted for roughly half of the acceleration in growth during the quarter, a figure that, if it holds or grows, would justify treating Snowflake as a genuine AI consumption play rather than a data-storage utility.
The broader tape is amplifying the move. Nvidia is rallying today after announcing a 13 billion dollar acquisition of AI model hub Hugging Face, reinforcing the narrative that AI infrastructure spending remains in acceleration. Software peers including ServiceNow, Atlassian, Salesforce, Adobe and Intuit are each up mid-single digits in sympathy, and the tech-software sector is broadly higher. Long-dated Treasury yields are also easing after touching multi-month highs in the prior session, which reduces the immediate discount-rate pressure on high-multiple growth names.
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Snowflake also disclosed a five-year, 6 billion dollar AWS Graviton compute agreement and an expanding 200 million dollar partnership with OpenAI, both of which management cited as cost anchors designed to cushion the margin impact of running AI workloads at scale. At least 34 brokerages raised price targets following the print, with Wells Fargo setting a Street-high target of 525 dollars.
The bear case is harder to dismiss than the stock price suggests. Remaining performance obligations fell sequentially for the second straight quarter, even as revenue accelerated, raising the question of whether enterprise customers are becoming more tactical about committing spend. Non-GAAP product gross margin guidance was trimmed again, to 74% for the full year from a 75% target management defended just one quarter ago, because AI workloads carry lower contribution margins than the core platform.
On a GAAP basis the company still reported a 263 million dollar operating loss, with 456 million dollars in stock-based compensation in the quarter alone. And at roughly 15 times forward revenue, Snowflake is trading at approximately double the multiple of the broader software sector, embedding a level of sustained AI-driven growth that leaves little room for execution missteps or a cooling in enterprise AI enthusiasm.
