Snowflake stock hovers near 5-year high: How strong AI demand sparked a 26% share rally

Shares of Snowflake climbed sharply on Thursday, 3 September, after the cloud data analytics firm beat Wall Street estimates for its quarterly results and raised its full-year product revenue forecast, driven by growing demand for its cloud data platform and artificial intelligence offerings.

The stock opened the session with a massive gap-up at $337 per share, compared with its previous close of $306. Buying momentum strengthened further in early trade, pushing the stock to $384 apiece, its highest level since late December 2021 and representing a gain of about 26% from Wednesday's closing price.

If the gains are sustained through the closing bell, the rally would mark Snowflake's biggest single-day surge since May.

For the quarter ended July, Snowflake's product revenue rose 37% year-on-year to $1.49 billion, driven by strength in its core data platform and a meaningful increase in AI-related revenue. The company reported total revenue of $1.55 billion for the quarter.

Remaining performance obligations, a measure of future contracted revenue, stood at $9 billion, compared with analysts' average estimate of $9.37 billion.

"Snowflake delivered another strong quarter, with product revenue of $1.49 billion, up 37% year-over-year, as Snowflake continues to power the enterprise AI revolution," said Sridhar Ramaswamy, CEO of Snowflake. "AI continues to compound our advantages, creating a flywheel effect across the business."

Snowflake reported adjusted earnings of 62 cents per share, comfortably above analysts' expectations of 45 cents per share.

The AI and data cloud company now expects product revenue for the fiscal year ending in January to reach approximately $6.07 billion. That was an increase from its May forecast and beat the analysts’ average projection of $5.86 billion. Product sales make up about 95% of the company’s total revenue.

Last quarter, Snowflake signed a five-year $6 billion agreement with Amazon Web Services to use AWS's Graviton processors and AI infrastructure. The agreement includes Amazon's general-purpose Graviton processor chips, which compete with Intel's offerings.

Snowflake stock extends its powerful rally

Snowflake shares have maintained a strong winning streak in recent months, closing three of the last four months in positive territory and delivering a cumulative gain of around 143%. The rally has also helped the stock outperform the broader market, with shares rising 40% through Wednesday, compared with a 12% gain in the S&P 500 over the same period.

After facing sustained selling pressure between November 2025 and April 2026, Snowflake staged a strong comeback in April, with the stock surging 87%. The recovery has been driven by rising demand for its core cloud data-warehousing products as companies migrate legacy systems to the cloud and increasingly adopt AI technologies.

The company's AI offerings have also continued to gain traction. Coding assistant Cortex Code surpassed 9,100 accounts after adding more than 2,000 during the quarter, while enterprise chatbot CoWork expanded to 5,800 accounts.

(With inputs from Bloomberg and Reuters)

Disclaimer: We advise investors to check with certified experts before making any investment decisions.