Snowflake (SNOW) Stock: Q2 Earnings Beat Sends Shares Up 14% in Premarket

TLDR

Table of Contents

Snowflake reported Q2 earnings of 35 cents per share on $1.14 billion revenue, beating analyst estimates of 27 cents and $1.09 billion
Stock surged 14% in premarket trading, adding over $11 billion to market cap if gains hold
Company raised full-year product revenue guidance to $4.4 billion from previous $4.33 billion estimate
Strong momentum reported on Microsoft Azure cloud service with usage surging in Europe, Middle East and Africa
Multiple analysts raised price targets, with Evercore ISI boosting target to $280 and BTIG to $276

Snowflake shares rocketed higher Thursday morning after the cloud data company delivered earnings that crushed Wall Street expectations. The stock jumped 14% to $228.29 in premarket trading.

The data warehousing firm reported second-quarter adjusted earnings of 35 cents per share. Revenue came in at $1.14 billion for the quarter.

Wall Street analysts had been expecting earnings of just 27 cents per share. Revenue estimates stood at $1.09 billion.

$SNOW Delivered 😏
• Sales $1.15B vs Est. $1.09B
• EPS $0.35 vs Est. $0.27
• Net Revenue Retention 125%
• RPO $6.9B — up 33% YoY
FY26 Guidance
• Product Sales $4.40B vs Est. $4.3B
• Operating Margin 9% vs. Est. 8%
More than 6,100 accounts are using Snowflake’s AI… pic.twitter.com/UeTzxb4uzw
— Shay Boloor (@StockSavvyShay) August 27, 2025

The strong results reflect growing demand for Snowflake’s artificial intelligence database products. Companies are racing to modernize their data infrastructure as they adopt AI tools.

CEO Sridhar Ramaswamy highlighted the company’s position in the AI revolution. “We have an enormous opportunity ahead as we continue to empower every enterprise to achieve its full potential through data and AI,” he said in the earnings release.

The premarket gains would add more than $11 billion to Snowflake’s market capitalization if they hold. The company’s market cap currently sits at around $67 billion.

Raised Guidance Points to Continued Growth

Snowflake also lifted its financial outlook for the rest of the year. The company now expects third-quarter product revenue between $1.124 billion and $1.13 billion.

That compares to the Wall Street consensus estimate of $1.121 billion. For the full year, Snowflake raised its product revenue guidance to $4.4 billion.

The new annual forecast sits above the company’s previous estimate of $4.33 billion. It also beats Wall Street’s expectation of $4.34 billion.

The guidance increase suggests management sees strong demand continuing. Companies are investing heavily in data infrastructure to support their AI initiatives.

Snowflake reported particularly strong momentum on Microsoft’s Azure cloud platform. Usage surged across Europe, the Middle East and Africa regions.

Analyst Upgrades Follow Strong Results

Several Wall Street analysts raised their price targets following the earnings beat. Evercore ISI’s Kirk Materne boosted his target to $280 from $240 while keeping an Outperform rating.

“The combination of accelerating revenue growth and operating margin leverage can drive further multiple expansion from current levels,” Materne wrote. He sees room for more guidance increases ahead.

BTIG’s Gray Powell also raised his price target to $276 from $235. He called the second-quarter results “exceptional” and maintained his Buy rating.

Powell believes Snowflake will be “a clear beneficiary of AI as companies work to centralize their data to build applications.” The analyst sees the company well-positioned in the AI infrastructure race.

D.A. Davidson’s Gil Luria rates the stock as a Buy with a $250 price target. He believes competition concerns are overblown despite rival Databricks recently raising funds at a $100 billion valuation.

Snowflake stock has climbed 30% this year as investors bet on its AI positioning. The shares had pulled back 11% from their 2025 peak of $225.79 hit on July 7.

The company trades at 142.52 times profit estimates. That’s higher than rivals MongoDB at 75.76 times and Datadog at 63.71 times earnings.

Nvidia’s recent strong forecast has boosted confidence across AI infrastructure stocks. The chip giant’s outlook points to sustained spending on data systems that should benefit Snowflake.

Richard Clode at Janus Henderson Investors sees Snowflake as part of a wave of next-generation database companies. “That’s a catalyst for new next generation databases, whether that be MongoDB, whether that be Snowflake, whether that be Databricks,” he said.

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