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

Shares of the company were up 11% in extended trading.

Snowflake is benefiting from the acceleration in AI software adoption and higher spending from enterprises looking to modernize data infrastructure.

With more organizations beginning to explore their GenAI strategies and build GenAI-powered apps, analysts expect Snowflake to be a natural choice for customers looking to simplify AI stacks for analytics.

The company expects annual product revenue of $4.40 billion, compared with its prior forecast of $4.33 billion.

For the second quarter ended July 31, Snowflake posted product revenue of $1.09 billion, in line with estimates, according to data compiled by LSEG.

Remaining performance obligations — the most popular measure of booked revenue — came in at $6.9 billion, a 33% growth from last year.

Snowflake’s cloud-agnostic platform enables organizations to host and manage AI models from various cloud providers in a single, centralized environment.

(Reporting by Juby Babu in Mexico City; Editing by Vijay Kishore)