Snowflake Stock Jumps 14% After Q2 Earnings Beat, Here’s Why

Snowflake (NYSE: SNOW) has given investors plenty to cheer about this quarter. The cloud data platform posted revenue and earnings above Wall Street expectations, raised its full-year outlook, and reminded the market why it is still one of the most closely watched AI infrastructure players. The Snowflake stock surged nearly 14% in after-hours trading as per Google Finance on the back of the results.

Let’s unpack what drove this performance, how markets reacted, and why analysts are calling this a turning point for the company.

Snowflake Q2 FY26 Earnings Snapshot

Source: Snowflake Q2FY26 8-K

Snowflake delivered across the board. Revenue came in at $1.14 billion, comfortably above consensus estimates of $1.09 billion. Earnings were even stronger, adjusted EPS of $0.38 smashed Wall Street’s forecast of $0.27. The company also grew operating income by nearly 45%, while free cash flow hit $165 million.

One metric that stood out was Remaining Performance Obligations, which jumped 33% to $6.9 billion. That essentially reflects future revenue already locked in through contracts, showing customers are committing more business to Snowflake.

Market Reaction to Snowflake: A 14% After-Hours Surge

Investors rewarded the beat instantly. Snowflake’s stock soared almost 14% in after-hours trading as per Google Finance after the release. The reaction is telling because Snowflake has faced questions over the past year about whether its growth could keep up with intensifying cloud competition.

What helped confidence even more was the raised full-year guidance. Management now expects FY26 product revenue growth of about 32-33%, higher than the earlier 30-31% range. Free cash flow margins are projected around 26%, signaling that the company is balancing strong growth with disciplined profitability. That upgrade made it clear this wasn’t just a one-off strong quarter, management believes momentum can carry through the rest of the year.

What Does Snowflake Actually Do?

For those less familiar, Snowflake runs the AI Data Cloud, a platform that helps businesses manage and analyze data across AWS, Azure, and Google Cloud. Unlike traditional databases, Snowflake lets storage and compute scale separately, an innovation that made it a hit among enterprises with large data needs.

Over the past year, Snowflake has expanded deeper into AI. Some recent initiatives include:

• Snowpark, allows developers to run Python, SQL, and machine learning workloads directly inside Snowflake.
• Cortex & AI Services, built-in AI tools for generative AI and unstructured data analysis.
• Snowflake Marketplace, where customers can share and monetize datasets and applications.

With these, Snowflake has turned itself from just a data warehouse into a broader AI and data infrastructure platform. It already counts over 12,000 customers, including 750+ members of the Forbes Global 2000, with more than 650 generating $1 million or more in annual revenue with the company.

Why This Quarter Stands Out for Snowflake?

Several factors make this earnings beat particularly significant:

• AI-driven demand: Enterprises are doubling down on AI and analytics, which directly fuels Snowflake’s adoption.
• Stronger financial discipline: Revenue growth above 30%, operating income up 45%, and steady free cash flow margins show improving execution.
• New leadership push: Under CEO Sridhar Ramaswamy, Snowflake has sharpened its AI focus and accelerated product innovation.
• Strategic deals: The recent ~$250 million acquisition of Crunchy Data adds PostgreSQL capabilities, broadening its AI Data Cloud.

Together, these moves suggest Snowflake is successfully addressing investor concerns around growth slowdown while carving out a clearer role in the AI ecosystem.

The Road Ahead for Snowflake

Snowflake’s Q2 FY26 print has re-energized investor sentiment. By beating estimates, raising guidance, and showing traction in AI-related offerings, the company is making a case that it can sustain growth despite tough competition from players like Databricks and hyperscalers.

For now, the nearly 14% after-market rally reflects renewed confidence. The big question ahead will be whether Snowflake can keep this momentum as AI adoption scales further.

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