AI application software stocks surged on Thursday. Snowflake up 20%; Snap up 7%; Palantir, ServiceNow up around 6%; TEAM, Workday up around 5%; Duolingo up nearly 4%.

Snowflake experienced a 35% year-over-year increase in revenue for its fiscal second quarter ending July 31. While the company still posted a net loss of $191.7 million, or 55 cents per share, this represents a significant improvement compared to the $297.9 million loss (89 cents per share) recorded during the same period last year.

Management attributed part of the growth to its AI-driven coding assistant, CoCo, which has now attracted 9,100 customer accounts, adding more than 2,000 in the latest quarter alone. Looking ahead, Snowflake forecasts third-quarter product revenue of $1.59 billion, comfortably ahead of the $1.50 billion consensus estimate from analysts surveyed by StreetAccount.

For the full fiscal year, the company has raised its product revenue outlook to $6.07 billion, up from the $5.84 billion projection made in May. Additionally, Snowflake now expects an adjusted operating margin of 14.5% for the year, a positive revision from the 13.5% previously forecast.

Year-to-date, Snowflake shares have climbed 39% through Wednesday's close, significantly outperforming the S&P 500's 12% gain over the same period. Should Thursday's trading session mirror the after-hours surge, it would mark the company's fourth-largest single-day gain since its market debut in 2020. Company executives are scheduled to hold a conference call with analysts at 5 p.m. Eastern Time to discuss the results.