(Reuters) - Snowflake raised its fiscal 2026 forecast for product revenue on Wednesday, betting on strong demand for its data analytics services as enterprises prioritize artificial intelligence spending.

The company's shares rose 6.87% to $191.42 in extended trading after it topped first-quarter results estimates and forecast current-quarter revenue above expectations. Snowflake's stock has risen 16% so far this year.

Snowflake's push to integrate artificial intelligence into its cloud through partnerships with OpenAI and Anthropic allows customers to build and run more advanced AI models to streamline large swathes of data.

The company is also benefiting from higher enterprise spending as firms shift their workloads to the cloud while looking to develop AI applications.

Snowflake's AI deals with other startups have helped it cater to a larger cohort of companies looking to build AI agents through its platform, analysts have said.

The company forecast product revenue in the range of $1.035 billion to $1.040 billion for the current quarter, compared with estimates of $1.021 billion, according to data compiled by LSEG.

Snowflake's first-quarter product revenue rose about 26% to $996.8 million, ahead of estimates of 21.5% growth to $959.2 million.

It now targets fiscal 2026 product revenue of $4.325 billion, compared with its prior target of $4.28 billion.

On an adjusted basis, the company earned 24 cents per share in the first quarter, compared with estimates of a profit of 21 cents per share.