Snowflake's (SNOW) contribution margins from its Cortex Code and artificial intelligence workloads are lower than its margins from core analytics and engineering workloads, Oppenheimer said in a Friday note.

While Cortex Code and AI-driven upside will weigh on the company's gross margin, the company would see higher revenue, making the trade-off a "positive," Oppenheimer said, adding that much of the margin pressures could be offset over time owing to scale and efficiency gains.

Oppenheimer said that Snowflake's comments at an investor meeting suggest that Cortex Code is already contributing to "deeper developer and platform engagement" beyond analytics, and that Cortex Code is expected to drive both front-end, agent-related consumption and later migration and use case ramp consumption.

Snowflake also recently previewed new autonomous AI platform called SnowWork, as the company's plans new releases to meet shifting customer expectation amid rising AI functions across corporates, Oppenheimer said.

The brokerage maintained its outperform rating on Snowflake, with a $250 price target.

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