HPE Soars After Full-Year Profit Outlook Tops Estimate — Closing Bell

[00:00:00] Speaker 1: And right now we are two minutes away from the end of the trading day. Romain Bostic here with Katie Greifel taking you through to that closing bell. It's a global simulcast. Tim Stenevich joins us now from the radio booth. Carol Masser is still away. Emily Grafiel fills in for today. Welcome to our audiences across all of our Bloomberg platforms television radio. Our partnership with YouTube here on an eighth straight day of gains for the benchmark S&P 500. Yeah looking like it's going to be an eighth straight day. There were some questions about what would happen earlier in the session. [00:00:30] Speaker 2: But still the S&P 500 up three tenths of one percent off its best levels of the day. I'm still watching oil which is still rising today. More than ninety two dollars a barrel for W.T.I. Brent futures at more than ninety five dollars a barrel. Both of those up more than you know. Wow. It looks at that W.T.I. up more than five percent almost six percent and Brent up Emily four point six percent. And you know for a day that tech is doing so well. One asset class selling off is Bitcoin. The cryptocurrency really hasn't [00:00:59] Speaker 3: participated in the recent rally. Tim and I were just discussing how it's been a little bit on the backseat. Yeah it's been interesting to see it sort of break apart from some of [00:01:08] Speaker 4: those asset classes and specifically those equities that it had been closely tracking. I couldn't tell you what exactly the narrative is in crypto right now. But that's Tim's job tomorrow at noon. I will say it's interesting to see what's going on with oil prices right now rising once again not necessarily taking a dent out of this equity market in fact boosting the energy sector which is just one of two sectors managing to climb today. Just a reminder we are going to get some earnings after the bill this from Hewlett-Packard [00:01:38] Speaker 1: enterprise. Oh and of course at the tail end of this week we get that big monthly jobs report here in the U.S. So two potential catalysts for this market is we get the closing bills in New York with the majority of stocks across this tape actually in the red but the right amount of stocks and more importantly the right complexion of stocks are in the green. And so you're looking at record highs pretty much across across the board. The Dow Jones industrial average adding about 47 points or a tenth of a percent. The S&P 500 closing out the day right around that 7600 level 20 points higher or a quarter of a percentage point higher. The Nasdaq composite up about four tenths of a percent. The Nasdaq 100 up six tenths of a percent. The Russell 2000 sitting this one out lower by about a half of a percentage [00:02:20] Speaker 2: point. You know we were talking with Matt Stuckey a few minutes ago over at northwestern mutual wealth management. He's chief portfolio manager for equities there. He talked about a lack of breadth and that's kind of what we're seeing in today's session too. And we've seen that over the last few months. I think it's fair to say we did even though we saw the S&P 500 move higher today. We saw more stocks lower than actually higher. 213 stocks moved higher. 290 stocks Katie fell. Well that dynamic is even more dramatic when you take a look at the sector [00:02:50] Speaker 4: level. As I mentioned you had just two sectors finish in the green. At least one of them was very important information technology higher by about about two and a half percent. Energy though also higher on the day about 1.9 percent as a sector in terms of what performed the worst. Utilities down 3 percent. Consumer discretionary down 2.6 percent. Real estate down 1.7 percent. So a lot of big moves to the downside at the sector level. But again you take a look at what game today. That's what mattered. All right. Well speaking of what game today we got to start with [00:03:23] Speaker 2: looking at Nvidia and Arm. Nvidia shares rising today. What more than 6.2 percent. We'll go ahead and round that up. 6.3 percent today. Arm holdings hitting a new intraday record today up at its best levels more than 20 percent. But closing 15.7 percent higher today. This after Nvidia announced a new product that combines an arm central processing unit CPU and a blackwell generation graphics processor. We're talking about the RTX spark super chip. It'll debut in laptop and desktop computers from Dell and Lenovo. It'll run Microsoft's Windows for arm operating system. Jensen announced this in Taiwan overnight. It'll allow for so-called AI PCs. We had a great chat with Ian King a little earlier. How much are these things going to cost? Oh we don't know about that yet. OK. But what we do know and I guess also what we don't know is like what normal people will do with these AI PCs. Qualcomm's been talking about this for years. But but what you know given what people do on computers right now and on their smartphones right now. Yeah. You know in the way they interact. I love it. Qualcomm because I'd also like to point out that [00:04:31] Speaker 1: Cristiano among the CEO of Qualcomm was also on that same stage. And nobody's talking about them for some reason because they [00:04:36] Speaker 2: basically have the same thing. At last check they do. And that last check shares of Qualcomm were down more than 8 percent. Yeah. But I haven't I haven't looked in the last couple hours. Also MGM Resorts International today. Shares surging. This after we learned Barry Diller has made an offer for the remaining portion of MGM Resorts International he doesn't already own finishing the day up more than 16 percent. The proposal is for the 74 percent we'll call it of MGM Resorts that it doesn't already own. It values the company at 18.8 billion dollars including debt. Diller believes the market quote materially undervalues the power and durability of MGM assets which have real world assets that AI cannot easily replicate or disintermediate an exceptional digital growth opportunities. Once again MGM Resorts up by 16 percent today. And finally how about a little movie theater. I don't know. AMC Entertainment 22 and a half percent higher today. We saw several movie theater stocks actually move higher today after a record box office weekend for the independent distributor of back rooms closing out the strong May lineup. AMC shares they're heavily shorted. They said that after yet another strong weekend at the box office in May they have seen the highest attended month of May going back to 2019. Have you seen this movie yet? I have not I have not seen it. Emily Griffin. I have not seen any movies Romain. I know. Well you have you have tiny kids. Yeah. Yeah. All you're watching are cartoons. I watched Marty Supreme on HBO Max. How was it? With your children. It came out a while ago. It did come out. For me that did not come out a while ago. I thought it was I thought it was fun. Okay. Really. Yeah. Yeah. Why. Yeah. I heard it was stressful. Well that's all the movies from those guys. Yeah. Yeah. Yeah. I don't. You [00:06:11] Speaker 3: see uncut gems. Yeah. Yeah. All right. I'm going to let Emily go. We'll go to the decliners. Similar theme to what Tim was just talking about here starting with Intel. Intel lower as Nvidia enters the PC market with a new chip. So a new chip that's weighing on shares of chip makers Intel. It's also weighing on Qualcomm as we had discussed. I picked Intel because it's a bigger market cap company but Qualcomm did fall about 8 percent. Intel closing the day down about 4.6 percent. The shares were down about 10 percent in the last five days. Almost 27 billion dollars in market cap erased for Intel though just today. I'm also looking at shares of Rocket Lab. Shares of Space Link stocks declined today. Rocket Lab down about 14.7 percent. This is all coming after a Blue Origin rocket exploded last week. So that trade in Space Link stocks continuing into this week. The Jeff Bezos backed firm Blue Origin's new Glenn rocket blew up on Thursday evening while undergoing a test on the Florida launch pad. And this of course is ahead of its plans for it to deploy satellites for Amazon's Leo which is a rival network to Starlink. Yeah. And then finally Ford shares dropping. Sorry Romain. Yeah. Sorry. We're getting earnings right now [00:07:30] Speaker 1: out of Hewlett Packard Enterprise crossing the wire and the shares on fire up about 15 percent. A lot of questions as to whether they would be participating of course in this AI boom. Net revenue in the most recent quarter up 40 percent to 10.7 billion dollars. The street was looking for 9.7. So basically came in about a billion dollars over that networking revenue was the star of the show. 2.69 billion. That's up from about 1.1 billion. 1.1 billion the previous year here. So a huge acceleration in growth there. Adjusted EPS also beat 79 cents a share. The street was looking for 54 cents. Here's your forecast for the full year. The company says expected adjusted EPS 335 to 345 a share. That's more than a dollar more than what it had previously guided for on both the top and low end of that range. It sees free cash flow of three and a half billion dollars for the full year up from its previous guidance of $2 billion. So you get the story here. This is a company projecting a huge acceleration in growth. And you now see those shares [00:08:31] Speaker 4: accelerating up 24 percent in the after hours trade. Yeah. Just amazing. Let's talk about the shares a little bit more here because I mean heading into these results today alone we saw HPE shares rise by more than 9 percent for the full year for 2026 year to date shares higher by 97 percent on a total return basis. There was this idea out there that maybe HP Enterprise maybe they faced a high bar after what we saw from Dell. But clearly if that bar was set even higher they seem to surpass at least take a look at the after of shares. Reaction here higher by nearly 25 percent at this point. OK. You guys are watching what's happening with Hewlett Packard [00:09:10] Speaker 2: Enterprise. I'm watching what's happening after hours with Credo Tech which going into today's print shares were up this year by close to 60 percent. Shares getting I wouldn't say crushed given what they've done this year but still down double digits right now. Fourth quarter revenue revenue coming in just above estimates at 437 million dollars. But let's look at the first quarter outlook. Seeds first quarter revenue 465 to 475. That comes in above estimates of 460 million dollars. Seeds first quarter adjusted gross margin above estimates at 67 to 69 percent. The estimate estimate was for 65 percent. I guess not enough for the high hopes that investors had going into this. Shares down about 12 and a half percent in the after hours. But again this shares up [00:09:56] Speaker 1: significantly this year close to 60 percent. All right. Well given some of that back here in the after hours trade let's take a quick look at yields because that could become a bigger part of the broader market story. We saw after seven straight days of declines in benchmark treasury yields. We actually saw them rise today on the 10 year. You see only slightly they're up about two basis points similar story for the 30 year yield which had been down for seven straight sessions or two year yield getting more of the action. That's up about three basis points and obviously a lot of that tied to that big move higher that we saw earlier today in oil. [00:10:28] Speaker 2: OK. Well we'll see what oil does tomorrow and we'll see the you know what we get out of the latest when it comes to the conflict tomorrow.