Earnings season is the heartbeat of the market - and every day brings fresh signals about where money is flowing.
With each report, we learn not just how companies are performing, but how investors are reacting.
In the Daily Beat, we spotlight the most important earnings moves from the prior session - the winners, the losers, and the reactions that reveal what really matters to the market right now.
Whether it’s a bellwether with broad economic implications or a niche name making waves, we cut through the noise to focus on the setups that matter most.
Here are the latest earnings stats from the S&P 500 👇
*Click the image to enlarge it
After reporting a double beat, the $30B cloud provider, Hewlett Packard Enterprise $HPE, rallied 1.5%, but had a slightly negative reaction score.
They posted revenues of $9.14B, versus the expected $8.84B, and earnings per share of $0.44, versus the expected $0.42.
Despite beating headline expectations, the $233B software giant, Salesforce $CRM, had a -3.73 reaction score.
Their report showed revenues of $10.24B, versus the expected $10.14B, and earnings per share of $2.91, versus the expected $2.78.
Now let's dive into the fundamentals and technicals 👇
HPE has been rewarded for 7 of its last 10 earnings reports 🔥
Hewlett Packard Enterprise rallied 1.5% after this earnings report, and here's what happened:
After announcing the acquisition of Juniper Networks in January 2024, the deal was finally closed in July of this year. This came after months of battling the U.S. Department of Justice over an antitrust lawsuit.
This led to a record quarter, with revenues reaching $9B for the first time, growing nearly 20% year-over-year. Annualized recurring revenue (a key performance indicator for the company) is growing at an astonishing 75% year-over-year as the AI as-a-service business is booming.
In addition to the great quarter, the management team increased its forward guidance.
The reaction to this news was extremely positive at the opening bell on Thursday, but sellers stepped in and drove the price lower for the rest of the session.
This came as no surprise to us, as we're technical analysts fluent in Fibonacci analysis. The price found resistance at the 161.8% extension, almost to the very penny.
Despite the intraday reversal, we think this name is about to break out. Its AI business is booming, and the market is consistently rewarding the stock when the company reports earnings.
Additionally, the acquisition of Juniper Networks, an all-cash deal worth nearly half of Hewlett Packard Enterprise's market capitalization (HUGE), has been met with a warm welcome from the market.
If and when HPE closes above 24, the path of least resistance will shift decisively from sideways to higher for the foreseeable future.
CRM suffered its 3rd consecutive negative earnings reaction 🐻
Salesforce fell 4.9% after this earnings report, and here's what happened:
The total top-line increased by 10% year-over-year, driven by 120% growth in AI annual recurring revenue over the same timeframe.
Since the launch late last year, the company's autonomous AI agent platform, Agentforce, has resulted in over 12,500 deals.
Building on the strong quarter, the management team also raised its forward guidance.
As we predicted in the last Weekly Beat column, the stock failed to rally after a double beat. This is consistent with what we've seen over the past two quarters.
The company is aggressively expanding its AI business with Agentforce and the pending acquisitions of Informatica for $8B and Regrello for $ 900M. Despite this effort, the market is punishing the shareholders.
Whatever they're doing, just isn't working...
After a strong bull run off the late 2022 low, the stock has carved out a massive distribution pattern. It's one bad day away from breaking down.
On a relative basis, the bears have already taken control, printing fresh multi-year lows versus the broader market. This supports new lows in absolute terms.
If and when CRM closes below 226, the path of least resistance will shift decisively from sideways to lower for the foreseeable future.
Happy Friday
-The Beat Team
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