Snowflake Reports Strong Q2 Earnings Driven by Product Revenue Growth and AI Adoption
Snowflake Inc (NYSE:SNOW) reported a strong second-quarter earnings performance, with product revenue growth accelerating to 37% year-over-year. This was driven in part by increased adoption of its artificial intelligence offerings. The company's stock surged over 20% following the report as Bank of America raised its price target for Snowflake from $395 to $470 and reiterated a Buy rating. Bank of America noted that newer customer cohorts are ramping up consumption faster than previous ones, with recent customers reaching 80% of purchased capacity sooner. The bank attributed this trend to AI-enabled migrations and the adoption of Snowflake's CoCo and CoWork offerings. Current remaining performance obligations grew by 42% year-over-year for the fourth consecutive quarter. The company added 48 net new enterprise customers with trailing 12-month spend exceeding $1 million, further indicating strong demand.
Topics: AI adoption cloud computing product revenue growth stock price movement