Why Snowflake Shares Surged Over 24% Pre-Market? Q2 Results Beat Expectations and Full-Year Guidance Raised

TradingKey - On September 3, Snowflake (SNOW) surged over 24% in US pre-market trading to near $380. The company's latest earnings report significantly beat market expectations, while it raised its full-year performance targets as continued growth in AI-related business boosted investor confidence.

Source: TradingView

After US markets closed on September 2 Eastern Time, Snowflake reported its financial results for the second quarter of fiscal 2027. For the quarter ended July 31, the company's quarterly revenue reached $1.55 billion, up 35% year-over-year and above market expectations of $1.49 billion. Product revenue came in at $1.49 billion, up 37% year-over-year, also topping analyst estimates.

Profitability also improved significantly. Snowflake's non-GAAP adjusted earnings per share for the second quarter were $0.62, higher than the market estimate of $0.45. Adjusted operating income reached $237 million, with the operating margin rising to 15.3%, a further improvement from the same period last year.

More notably, the company also raised its full-year performance guidance for fiscal 2027. Snowflake expects full-year product revenue of approximately $6.07 billion, representing a 36% year-over-year increase, which is not only higher than its previous guidance of $5.84 billion but also beats market expectations of $5.86 billion. Meanwhile, the company raised its full-year non-GAAP operating margin target from 13.5% to 14.5%.

Market participants believe that Snowflake's growth potential in the AI data infrastructure sector is being further unlocked. As enterprises accelerate the adoption of generative AI and data cloud services, revenue from the company's core products maintains rapid growth, while customer expansion in new businesses such as AI-assisted coding tools also provides support for future growth.