Snowflake Jumps 17% After Earnings — Can the AI Re-Rating Continue?

Snowflake’s latest earnings report reignited investor enthusiasm around cloud data and AI software. Fiscal Q2 revenue reached $1.55 billion, up 35% year over year and above the $1.48 billion consensus. Product revenue rose 37% to $1.49 billion, while adjusted EPS came in at $0.62 versus expectations of $0.45.

More importantly, Snowflake raised FY2027 product revenue guidance from $5.84 billion to $6.07 billion, implying roughly 36% growth. SNOW responded with a 16.55% post-earnings rally, closing at $356.47.

AI Starts to Deliver

The strongest part of the quarter was AI-driven demand. Management said AI contributed roughly half of the recent acceleration in growth. Products such as CoCo and CoWork are increasingly entering customer workflows, while CoCo added more than 2,000 accounts during the quarter.

AI workloads are also increasing usage of Snowflake’s core data platform. That matters because AI is beginning to move beyond narrative and into measurable consumption growth.

Product revenue growth has now accelerated for three consecutive quarters. For investors, this trend is more important than a one-quarter earnings beat because it suggests Snowflake may be entering a new period of stronger growth.

Valuation Is Expensive Again

The stronger outlook has pushed Snowflake back toward a premium valuation. With a market capitalization of roughly $123 billion, the stock trades at around 22 times trailing sales.

Consensus estimates put FY2027 total revenue near $6.3 billion and FY2028 revenue close to $8 billion, leaving SNOW at nearly 20 times FY2027 sales.

That valuation can still be supported if product revenue continues growing around 35% or faster while margins improve. However, the stock is no longer cheap. Further upside increasingly depends on Snowflake proving that AI can sustain stronger consumption growth rather than simply creating another temporary valuation expansion.

Technical Breakout

SNOW reached an intraday high of $384.55 after earnings, setting a new 52-week high before closing at $356.47. The long upper wick shows that profit-taking has already appeared near the highs.

The $355 area is now the first level to watch. Holding above this zone would keep the post-earnings breakout structure intact.

More important support sits around $330–$340, where the previous consolidation range and earlier highs overlap. A break below $330 would weaken the current bullish structure and raise the risk of a deeper retracement.

On the upside, $385 remains the key resistance level. A clean breakout above it could open the way toward $400 and potentially higher.

Trading Strategy

At current levels, SNOW offers a better risk-reward profile on a confirmed pullback than on an immediate chase after the earnings spike.

In the bullish scenario, the stock holds around $355 and later breaks above $385. That would confirm continued momentum, with $400 as the first major target.

In the neutral scenario, SNOW may consolidate between $340 and $385 as investors wait for further evidence of product revenue growth and AI-driven consumption.

In the bearish scenario, a break below $330 would suggest that investors are beginning to unwind part of the recent AI re-rating. In that case, protecting capital should take priority over buying the dip.

Snowflake’s fundamentals have clearly improved, but expectations have risen just as quickly. The key question is whether product revenue growth above 35% can be sustained.

As long as AI continues driving platform consumption and growth remains strong, Snowflake’s premium valuation can be justified. If growth starts to slow again, however, the current multiple leaves little room for disappointment.