Snowflake (SNOW) stock has returned 169% over the past six months, against 14.0% for the S&P 500. Investors appear to believe artificial intelligence has put the company on a faster growth track, and the latest quarter supports that view. Yet on the most recent earnings call, executives pointed out a catch in the AI business. So what is the catch?

What Did Snowflake’s Management Flag About AI?

Executives said Snowflake earns less on its AI sales than on the rest of its product lineup. During the fiscal Q2 2027 call on September 2, 2026, the company lowered its fiscal 2027 forecast for adjusted product gross margin to 74%, from 75% on the prior call. Management cited a larger share of sales coming from fast-growing…