Snowflake Stock Surges on Growth of Newly Launched Product Cortex Code
Snowflake (SNOW) stock has surged nearly 98% over three months, outperforming the S&P 500 and major cloud peers like Microsoft (MSFT), Amazon (AMZN), and Alphabet (GOOGL). The growth was driven by a significant increase in product revenue to $1.334 billion during fiscal Q1 2027, with year-over-year growth accelerating from 26% to 34%. Management raised its full-year guidance for product revenue and operating margins due largely to the success of Cortex Code, an AI-powered coding agent launched just weeks before a previous forecast. The company had previously guided fiscal 2027 product revenue at $5.66 billion in February but could not include Cortex Code's impact because it was too new for modeling. Three months later, with Cortex Code adopted by over 4,400 customers and Snowflake Intelligence reaching significant adoption milestones, the guidance increased to $5.84 billion. The acceleration of AI-driven product usage also contributed to a faster-than-expected growth in remaining performance obligations. Despite high implied volatility before the surge indicating market uncertainty about direction, management's transparency that its forecast excluded Cortex Code served as an early signal for investors.
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Topics: Cortex Code guidance revision product revenue growth Snowflake