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Analyst Targets

• Raymond James – Outperform, raised to $425 from $275
• DA Davidson – Buy, raised to $450 from $300
• Evercore ISI – Outperform, raised to $430 from $360
• UBS – Buy, raised to $500 from $425
• Deutsche Bank – Buy, raised to $400 from $350
• Piper Sandler – Overweight, target raised September 3, citing a durable consumption flywheel

What Just Happened

Snowflake closed Wednesday’s session at $305.84. By Thursday morning it was trading near $374, a gap of roughly 21% on volume that made it the single largest mover in the software sector. The reaction was not sentiment. It was a reset driven by one number that the Street did not expect: 37% product revenue growth, seven points above the 30% consensus model.

Options markets had implied a 12% move around the earnings release. The actual move was nearly double that.

Company Profile

Snowflake offers a cloud-native data platform. Its core business is providing organizations with services to store, manage, and analyze large volumes of data, and its architecture separates compute and storage, which allows customers to scale as their needs evolve. That consumption model, where customers pay for what they use rather than committing to a fixed seat license, is both the company’s edge and the metric Wall Street watches most closely: accelerating consumption means enterprises are not just buying access but actively building on the platform.

The Numbers

• Total revenue: $1.55 billion vs. $1.48 billion expected, up 35% year over year
• Product revenue: $1.49 billion, growth accelerating to 37% year over year, the second consecutive quarter of record sequential dollar growth
• Non-GAAP EPS: $0.62 vs. $0.45 estimate
• Non-GAAP operating margin: about 15%
• Net revenue retention: 126%; remaining performance obligations about $9 billion
• Large customers: 65 accounts generating over $10 million in trailing 12-month product revenue; 828 accounts over $1 million, with 48 net new additions above that threshold
• Net new customers: 692 in the quarter, including 14 from the Global 2000, bringing total customers to 14,554
• FY2027 guidance: Product revenue raised to $6.07 billion, representing 36% growth
• Margin guidance: Full-year non-GAAP operating margin raised to 14.5% from 13.5%

Why the Stock Gapped

Three things moved simultaneously, and institutional models were wrong on all three. First, the growth rate. Product revenue accelerated to 37% year-over-year growth in Q2, marking the third straight quarter of acceleration. Growth reacceleration after a period of deceleration commands a significant multiple expansion.

Second, the EPS beat was not marginal. Revenue came in at $1.55 billion against analyst estimates of $1.48 billion, and adjusted earnings reached $0.62 per share against estimates of $0.45. That kind of gap closes the debate over whether this is a growth-with-discipline story or simply a growth story burning cash.

Third, the guidance raise went further than most expected. The annual product revenue forecast was elevated to $6.07 billion from the previous $5.84 billion target.

CoWork, CoCo, and the Flywheel Argument

AI products including CoWork and CoCo continued gaining customers, with management pointing to a meaningful step up in AI revenue alongside strength in the core data platform business. That last clause matters most. AI products are not just stand-alone revenue lines; they pull through consumption of the underlying data infrastructure.

CoCo surpassed 9,100 accounts, adding more than 2,000 accounts in the quarter, while CoWork expanded to 5,800 accounts. Piper Sandler noted that CoCo is now used in more than 60% of the customer base and is driving accelerating consumption on the core Snowflake platform. That penetration rate is what makes the flywheel language credible rather than promotional.

Macro Context

Enterprise AI spending has not been uniform. Competitors in the data layer, including Databricks privately and MongoDB publicly, are competing for the same workloads. Altimeter Capital founder Brad Gerstner highlighted that when SNOW last traded near $375 in 2021, the company had roughly $1 billion in revenue. Today it is guiding to roughly $6 billion of product revenue for FY2027. That context reframes the valuation debate considerably.

Forward Scenarios

Bull

The bullish case is becoming easier to articulate: Snowflake is showing accelerating growth at the same time that AI adoption is creating new workloads for its platform, and CoCo, CoWork, and other AI products could encourage customers to consume more data and services. Sustained 36% growth with margin expansion above 15% supports a target range of $430 to $500.

Base

Growth settles near 32 to 34% through the second half of FY2027 as the AI contribution normalizes. The company maintains its 23% non-GAAP adjusted free-cash-flow margin guidance. The stock holds in the $370 to $420 range as targets cluster.

Bear

The bear case is that CoCo adoption stalls before reaching the full customer base, the consumption model limits revenue visibility, and the market rerates Snowflake back toward pre-earnings sentiment. The 21% Thursday gap raises the bar for future results, and the latest surge means investors are now paying a higher price for continued acceleration.

Technical Overlay

The stock closed Wednesday at $305.84 and gapped above its prior 52-week high of roughly $342 on Thursday’s open. A break above $330 was the level some analysts had identified as the trigger for a run toward $400, a price SNOW had not closed above since late 2021. That level is now support, not resistance. The gap between $306 and $374 becomes the zone to watch on any pullback. The RSI reading after the gap is deep in overbought territory, which typically precedes at least a brief consolidation before any continuation.

What to Watch

• CoWork and CoCo account growth next quarter: the flywheel thesis requires continued net adds above 2,000 per quarter for CoCo
• Net revenue retention staying at or above 126%, the clearest signal of consumption intensity
• Remaining performance obligations: the about-$9 billion backlog and the share expected to convert within 12 months matter more than any single quarter
• Analyst revisions over the next two weeks, particularly from firms still below $400
• MongoDB and Databricks results as read-through on enterprise data spend broadly

Bottom Line

The debate about Snowflake entering Wednesday was whether AI workloads were producing real consumption or were still in a proof-of-concept phase that would not show up in revenue. Q2 answered that directly. Three consecutive quarters of accelerating product revenue growth and a 7-point beat on the consensus growth rate do not leave much ambiguity. The raise to $6.07 billion FY2027 guidance, delivered alongside margin expansion, is what pushed the stock above its old highs rather than back to them. What determines the next move from here is not whether Snowflake’s AI products are real. It is whether CoCo and CoWork can keep expanding their account bases fast enough to sustain a growth rate above 35% against a much harder year-ago comparison in the back half of FY2027.