Snowflake (SNOW) shares have returned 169% over the past six months, versus 14.0% for the S&P 500, as investors appear to believe AI has put the company on a faster growth path. However, on the fiscal Q2 2027 call on September 2, 2026, management lowered its fiscal 2027 adjusted product gross margin forecast to 74% from 75%, as a larger share of sales comes from AI workloads that currently carry lower margins. Product revenue grew 37% year over year, with AI products contributing about half of that acceleration. Product revenue makes up 95% of total sales, while the company posted a net margin of negative 20.1% over the past twelve months. Management also raised its fiscal 2027 adjusted operating margin forecast to 14.5% from 13.5%, but the article says adjusted product gross margin is the key figure to watch in the fiscal Q3 2027 report.
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