Snowflake lifts fiscal 2027 outlook as AI products drive record growth
The data cloud giant raised its full-year product revenue guidance to $5.84 billion, citing strong adoption of its AI coding agent and gateway, even as the stock has already surged 48 per cent this year.
Snowflake has strengthened its financial outlook for fiscal 2027, attributing a surge in first-quarter performance to the rapid adoption of its artificial intelligence products. The company reported revenue of $1.39 billion for the quarter, a 33 per cent increase year-over-year, while product revenue climbed 34 per cent to $1.33 billion. Management described the result as the strongest sequential dollar growth in the company’s history, signalling a potential reversal of a prolonged growth slowdown.
The upward revision in guidance reflects confidence in two key offerings: Cortex Code, an AI-powered coding agent branded as CoCo, and the Cortex AI gateway. The gateway serves as a centralised control plane and governance layer for enterprise AI agents, allowing organisations to monitor consumption costs and manage security. Together, these tools are central to Snowflake’s vision of the “Agentic Enterprise,” enabling the company to move deeper into AI operations.
In response to the results, Snowflake raised its full-year fiscal 2027 product revenue outlook to $5.84 billion, up from previous guidance of $5.66 billion. This represents 31 per cent year-over-year growth. The company’s remaining performance obligations also expanded significantly, reaching $9.21 billion, a 38 per cent increase that suggests sustained demand from enterprise clients.
Wall Street analysts have reacted positively to the data, with TD Cowen raising its price target to $370 from $300 on 20 August while maintaining a Buy rating. The firm was joined by Deutsche Bank, Truist, BofA, and UBS in lifting their respective targets. TD Cowen highlighted CoCo and the Cortex AI gateway as primary catalysts for continued acceleration, noting that the coding agent is unleashing new AI accelerants for the platform.
Despite the bullish sentiment, the stock has already risen 48 per cent year-to-date, raising questions about whether the current valuation fully prices in the growth narrative. The September 2 earnings report will be a critical test, as the market may demand another surprise rather than mere confirmation of the trend. While the bull case is credible, analysts suggest the easy re-rating may have already occurred, leaving little room for disappointment.
Institutional interest in the stock remains robust, with recent filings showing substantial buying by major funds. Point72 Asset Management, for instance, increased its position by approximately 2,449 per cent to 2.81 million shares, valued at $716.1 million. Although 80 hedge funds held stakes in the first quarter of 2026, down from 90 in the prior quarter, the aggressive accumulation by large players underscores the ongoing confidence in Snowflake’s AI-driven trajectory.
