Snowflake shares advanced 6% on Friday after the data cloud company unveiled a new AI-powered search capability for its marketplace, a move that reinforced the bullish case for software names riding enterprise demand for artificial intelligence.
The feature, called Agentic Marketplace Discovery, entered public preview and lets users locate and evaluate relevant listings on Snowflake's Marketplace by submitting natural-language queries to the company's AI assistant, CoCo. According to Snowflake's release notes, the tool is accessible through the Marketplace Discover page within Snowsight.
Why the launch matters for the software trade
The rollout lands at a moment when investors are weighing whether AI spending will translate into durable revenue growth for software vendors, or whether the technology will erode demand for conventional application software. Snowflake's platform is used by enterprises to store, process, analyse and share data, and management has argued that AI is pulling new workloads onto the platform as companies seek governed data and business context to make AI applications effective.
The marketplace upgrade is the latest in a series of efforts by Snowflake to capture AI-related workflows, this time by making it easier for customers to surface and compare data offerings through conversational queries rather than manual browsing.
Revenue momentum accelerates
Recent financials support the narrative. Snowflake reported $1.49 billion in product revenue for the second quarter of fiscal 2027, up 37% year over year. Product revenue growth has now accelerated for three straight quarters, which management credited to contributions from the core data platform alongside a meaningful step-up in AI revenue.
That acceleration is central to the bull case, since it offers evidence that AI workloads are additive rather than cannibalistic for the company's core business.
JPMorgan sees more room for software gains
JPMorgan expects the recovery in software stocks to extend as third-quarter earnings provide further confirmation of AI-related demand for infrastructure software and help calm fears about disruption to application software. The bank's preferred names heading into earnings season include Microsoft, ServiceNow, Snowflake and Cloudflare.
Analyst Samik Chatterjee argued that application software shares could be re-rated higher if company fundamentals prove more resilient than investors currently assume. In his view, gains for application software are more likely to come from multiple expansion as low expectations tied to AI disruption fears are revised, while infrastructure software names should benefit from upward earnings revisions as AI demand feeds revenue growth, even with valuations already elevated.
For Snowflake specifically, JPMorgan expects faster customer migrations and rising AI-related revenue to drive results. The bank also projects Cloudflare's revenue growth accelerating into the high-30% range on demand for security and network performance from AI-focused companies.
Citi raises its target
Citi has also turned more constructive. In September, analyst Tyler Radke lifted his price target on Snowflake to $490 from $395 while keeping a Buy rating, saying the second-quarter fiscal 2027 results backed the "AI-driven flywheel thesis."
The marketplace launch adds another feature aimed at helping customers discover and use data-related offerings, while the accelerating product revenue growth offers evidence of stronger platform demand.
Attention now turns to upcoming earnings for signs that AI-related workloads can sustain growth across the software sector. For Snowflake, analysts highlight customer migrations, AI revenue and continued demand for the core data platform as the key variables to watch.
This article is for informational purposes only and does not constitute financial advice.
