Snowflake stock soars after it gives investors another reason to get excited about the AI boom

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Samuel O’Brient

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The move: Snowflake stock jumped as much as 26% on Thursday, to a high of $384.55. Shares of the software maker are up 68% year to date.

Why: The surge on Thursday follows a strong Q2 earnings report. Snowflake's results came in above Wall Street's estimates on key metrics, with product revenue reaching $1.49 billion, a 37% year-over-year increase, while the company also raised revenue guidance for the current quarter and the fiscal year.

Importantly, the company reported a big jump in adoption of its AI coding agent, CoCo, which added over 2,000 accounts in the quarter, bringing the total to 9,100.

It's the second straight quarter of red-hot results and stellar post-earnings gains for the stock. Share surged more than 40% after it reported first quarter earnings at the end of May.

Snowflake was among the companies that saw its stock crushed on fears of a "Saaspocalyse" earlier in the year, as AI startups rolled out tools and updates that investors saw as a threat to the sector.

"Q2 marks our third consecutive quarter of product revenue growth acceleration, driven by strength in both our core data platform and a meaningful step-up in AI revenue," stated Snowflake CFO Brian Robins. "Balancing growth with discipline remains a top priority, and we are raising our full-year product revenue growth guidance to 36% year-over-year.

What it means: Snowflakes results, particularly the accelerating adoption of its AI coding tool, is a bullish update for Wall Street's favorite trade, as it demonstrates that enterprise customers are increasingly using the software tools that AI hardware is enabling.

The report renewed bullish sentiment toward the company and the stock among Wall Street analysts. Bank of America and Deutsche Bank both increased their price targets, while others see the report as a strong indicator for the AI trade broadly.

"The bigger thematic story here is that the Snowflake print (coupled with material growth rate accelerations at peers Palantir and Databricks) is compelling evidence of strong enterprise AI adoption, a critical pillar of the long-AI trade," wrote UBS analyst Karl Keirstead.

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Samuel O'Brient

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Samuel O'Brient is an experienced financial markets and business journalist who has written extensively on a wide range of topics involving economics, technology and public policy. At Business Insider, he covers important macro and micro economic stories, including takes from leading economists and hedge fund managers, breaking IPOs,  corporate bankruptcies, meme stocks and short-selling. He also writes on other markets such as crypto, oil and real estate.He has interviewed many of the market’s most influential voices, ranging from top economists such as Mark Zandi and Richard Thaler to prominent investors including Danny Moses, Andrew Left, Anthony Scaramucci, Louis Navellier and Grant Cardone.Programs such as LiveNOW from Fox , Taking Stock and Ticker News have had Samuel on to discuss stock market and economic developments. His reporting has been cited by The New York Times DealBook, Bloomberg Radio, Forbes, Entrepreneur, Gizmodo and TheFutureParty.Samuel began at InvestorPlace, covering investing, retail trading and macro economic trends. Prior to joining Business Insider,  he served as a technology markets reporter at TheStreet. He is a graduate of Sarah Lawrence College and Trinity College Dublin.Samuel's work has appeared in publications such as TipRanks, EV and Observer. When he isn't chasing down stories, he can often be found browsing book and record shops. To reach Samuel, email him at [email protected] or connect with him on LinkedIn. He is also on Signal as Samuel Clemens.