Snowflake (NYSE:SNOW) shares jumped more than 20% in extended trading following the release of its fiscal 2027 second-quarter earnings report, which featured a third consecutive quarter of accelerating growth driven by artificial intelligence products. As of the latest data, the stock trades at approximately $338, reflecting strong investor confidence in the company’s ability to outperform its own forecasts.

Market Context

The broader market has been closely watching data infrastructure plays for signs of sustained enterprise spending, particularly in the AI sector. Snowflake’s performance stands out as a bellwether for cloud software demand. The company’s ability to raise guidance twice in a single fiscal year—moving from an initial 27% product revenue growth forecast to 36%—signals a robust environment for enterprise data workloads. This momentum contrasts with cooling growth in some other SaaS metrics, such as Remaining Performance Obligations (RPO), which decelerated to 30% year-over-year growth, down from 42% at the end of fiscal 2026.

Analysis

Management now expects approximately $6.07 billion in product revenue for fiscal 2027, representing 36% year-over-year growth. This guidance implies a clear path to surpassing $8 billion in product revenue in fiscal 2028. To achieve this, Snowflake would need to grow from $6.07 billion to $8 billion, requiring roughly 32% growth next year. Given that the company recently posted 37% year-over-year growth in the fiscal second quarter (ended July 31), the required deceleration of only four percentage points appears manageable to institutional analysts. CFO Brian Robins attributed the acceleration to strength in the core data platform and a meaningful pickup in AI revenue. The company also raised its full-year non-GAAP operating margin outlook to 14.5% from 13.5%, highlighting improved operational efficiency alongside top-line growth.

Key Numbers

- Fiscal 2027 Product Revenue Guidance: ~$6.07 billion (36% YoY growth)

- Fiscal 2026 Product Revenue: $4.47 billion (29% YoY growth)

- Fiscal 2027 Q2 Product Revenue: $1.49 billion (37% YoY growth)

- Net Revenue Retention Rate: 126% (up from 125% in fiscal 2026)

- Remaining Performance Obligations (RPO): $9.00 billion (30% YoY growth)

- Non-GAAP Operating Margin Guidance: 14.5% (raised from 13.5%)

- Share Price Move: +20% in extended trading; trading at ~$338

What to Watch

Traders should monitor whether Snowflake can maintain its net revenue retention rate above 125% as AI adoption matures. While the $8 billion product revenue milestone in fiscal 2028 is within reach, the deceleration in RPO growth from 42% to 30% suggests caution regarding the pace of new contract signings. Key levels to watch include the $338 price point as support, and upcoming guidance updates that may further adjust the fiscal 2028 trajectory. The market will also be scrutinizing the sustainability of AI-driven revenue acceleration versus core platform stability.