HPE surges 35% as it joins the club of wild post-earnings stock moves

HPE

• Hewlett-Packard shares surged 35% on Tuesday after a stellar, AI-driven earnings report.
• The legacy computing giant saw its revenue increase 40% year-over-year.
• The results add to a string of huge post-earnings stock moves for companies in recent weeks.

The move: Hewlett-Packard Enterprise became the latest member in a club of companies that have seen huge stock rallies after earnings.

Shares of HPE soared on Tuesday as traders took in the computing giant's stellar first-quarter earnings report. The stock surged 35% at the open to trade at 64.21.

Why: The company posted its biggest earnings beat in about eight years. Earnings per share came in at $0.79 for the first quarter, smashing expectations of $0.53.

Revenue surged 40% year over year to $10.68 billion, nearly $8 billion of which was driven by cloud and AI revenue.

HPE lifted full-year earnings guidance, and told investors it's currently two years ahead of its long-term financial goals.

What it means: The computer giant is adding to a string of earnings beats across the tech sector that have sparked enormous stock gains. The moves signal the intense resurgence of AI hype after the trade took a breather in the first quarter.

HPE's results are also adding to brewing fear in the market of an earnings-fueled bubble that could deflated once earnings season winds down.

ServiceNow, Snowflake, and Dell are among some of the tech giants that have also wowed investors on earnings lately, posting gains of up to 40% the day after reporting results.

AI has driven a resurgence of legacy, dot-com era tech stocks, including Dell, Cisco, and Intel. It's also helped revive the market's software sector, which was crushed during the first quarter amid a panic about the impact of AI on the sector.

The iShares Expanded Tech-Software Sector ETF, one prominent gauge for how brutal the software sell-off has been, has climbed out of its bear market and is up 5% year-to-date.

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