Snowflake Raises Full-Year Revenue Guidance as AI Deployments Accelerate Data Platform Growth

Enterprise adoption of artificial intelligence continues to expand Snowflake Inc.'s addressable market rather than undermine its core data infrastructure business. For the second quarter of fiscal 2027, the company generated $1.49 billion in product revenue, marking a 37% increase compared to the same period last year. The performance represents Snowflake's third straight quarter of accelerating growth, with total revenue rising 35% to hit $1.55 billion. Building on this momentum, corporate management updated its full-year fiscal 2027 product revenue growth forecast to 36%, up from its previous projection of 31%.

Customer integration of artificial intelligence tools served as a primary catalyst behind the revenue expansion. Accounts utilizing Snowflake's CoCo feature surpassed 9,100 after adding more than 2,000 users during the quarter, while adoption of its CoWork platform expanded to 5,800 customer accounts. This pattern has established a compound effect across the business, as organizations ingest larger volumes of enterprise data into the platform to deploy AI tools, subsequently driving overall platform consumption.

Broader spending trends among existing enterprise clients remained solid, reflected in a net revenue retention rate of 126%. Remaining performance obligations expanded 30% year-over-year to hit $9 billion. During the second quarter, Snowflake added 692 net new customers, representing a 32% year-over-year gain. The cohort of large enterprise accounts generating more than $1 million in trailing twelve-month product revenue grew 27% to reach 828 clients.

The figures put Snowflake ahead of several cloud database competitors. Industry rival MongoDB reported 30% year-over-year total revenue growth for its corresponding quarter, trailing Snowflake's 35% top-line expansion. Additionally, Snowflake's 37% product revenue rise outpaced MongoDB's 31% subscription revenue growth. Despite the top-line trajectory, short sellers maintain a visible presence, with short interest in Snowflake standing at 5.56% of its available float, compared to 3.62% for MongoDB.

Institutional interest registered an uptick according to data tracked by Insider Monkey, which recorded 103 hedge funds holding long positions in Snowflake at the conclusion of Q2 2026, up from 80 funds at the end of Q1 2026. Following the quarterly report, Jefferies analyst Brent Thill raised his price target on Snowflake shares to $430 from $385 while reiterating a Buy recommendation. In a research note first reported by Yahoo Finance, Thill pointed to the quick uptake of CoCo and executive sentiment that the tool is one of the company's most accessible solutions to market.

Snowflake's updated financial outlook also included increased profitability targets, raising its full-year fiscal 2027 non-GAAP operating margin guidance to 14.5% from 13.5%. The company projects its adjusted free cash flow margin to settle at 23% for the full year. With total full-year fiscal 2027 product revenue expected to reach $6.07 billion, Snowflake's chief executive disclosed that artificial intelligence workloads were responsible for roughly half of the company's recent growth acceleration.

Cautionary sentiment centers on whether Snowflake can consistently convert user additions for CoCo and CoWork into ongoing billable compute usage amid intense platform competition. Furthermore, processing intensive AI workloads poses potential pressure on profitability, as management trimmed its non-GAAP product gross margin forecast for fiscal 2027 to 74%, down slightly from a previous target of 75%.