Snowflake raised its forecast for fiscal 2026 product revenue on Wednesday, banking on strong demand for its data analytics services, as enterprises prioritize artificial intelligence spending.
Shares of the company were up 13 per cent in extended trading.
Snowflake is benefiting from the acceleration in AI software adoption and higher spending from enterprises looking to modernize data infrastructure.
With more organizations beginning to explore their GenAI strategies and build GenAI-powered apps, analysts expect Snowflake to be a natural choice for customers looking to simplify AI stacks for analytics.
Snowflake’s cloud-agnostic platform enables organizations to host and manage AI models from various cloud providers in a single, centralized environment.
Microsoft’s Azure showed the fastest growth among Snowflake’s supported clouds, seeing an acceleration of 40 per cent from last year, CEO Sridhar Ramaswamy said on a post-earnings call.
“Microsoft is very strong in Europe, Middle East and Africa, and we’re seeing a good uptick in our EMEA business with some large accounts,” Ramaswamy added.
In July, Microsoft forecast a record $30 billion in capital spending for the current fiscal first quarter, after booming sales in the Azure cloud computing business showcased growing returns on its massive bets on AI.
Snowflake expects annual product revenue of $4.40 billion, compared with its prior forecast of $4.33 billion.
For the second quarter ended July 31, Snowflake posted product revenue of $1.09 billion, in line with estimates, according to data compiled by LSEG.
Remaining performance obligations — the most popular measure of booked revenue — came in at $6.9 billion, a 33 per cent growth from last year.
