Stocks making the biggest moves after hours: Nvidia, Salesforce, HP and more

After-hours trading saw significant movement in tech stocks following earnings reports; Nvidia surged 5% on strong data center growth and better-than-expected results, while HP plummeted 15% on disappointing guidance. Salesforce rose 1% after beating estimates and raising its full-year forecast, and Veeva Systems and C3.ai also experienced gains due to positive guidance and strong quarterly reports, respectively; conversely, SentinelOne shares fell 11% on lackluster earnings and weak guidance.

Analysis

After-hours trading revealed significant divergence in technology stock performance, heavily influenced by quarterly earnings reports and forward-looking guidance. Nvidia (NVDA) shares surged 5% after exceeding analyst expectations for its first quarter, reporting adjusted earnings of 96 cents per share on $44.06 billion in revenue, against estimates of 93 cents and $43.31 billion respectively; its data center business was a key driver, posting 73% year-over-year growth. Similarly, Veeva Systems (VEEV) experienced a 16% share increase on optimistic second-quarter guidance, projecting adjusted earnings between $1.89 and $1.90 per share, surpassing the $1.79 consensus, and also raised its full-year outlook. C3.ai (AI) shares climbed 14% following a narrower-than-anticipated fiscal fourth-quarter loss of 16 cents per share (versus 20 cents expected) and revenue of $109 million, which edged out the $108 million consensus. Salesforce (CRM) rose approximately 1% after its fiscal first-quarter earnings of $2.58 per share (ex-items) beat the $2.54 estimate, and revenue of $9.83 billion topped the $9.75 billion expectation, leading to an improved full-year forecast. Agilent Technologies (A) also saw a 6% rise, with fiscal second-quarter adjusted earnings of $1.31 per share and $1.67 billion in revenue beating estimates of $1.26 and $1.63 billion. Conversely, HP (HPQ) shares plummeted 15% due to disappointing fiscal third-quarter adjusted earnings guidance of 68 to 80 cents per share, significantly below the 90 cents LSEG consensus, compounded by a second-quarter adjusted earnings miss. SentinelOne (S) shares dropped over 11%, impacted by first-quarter adjusted earnings of 2 cents per share meeting expectations but revenue of $229 million only slightly beating the $228 million estimate, and critically, weak second-quarter revenue guidance of $242 million versus the $245 million anticipated. Pure Storage (PSTG) shares declined about 3% despite reaffirming full-year revenue guidance of $3.515 billion, narrowly above Wall Street's $3.51 billion estimate; the departure of CFO Kevan Krysler, who will stay until a successor is found, likely contributed to investor caution. The market's reaction underscores a strong emphasis on future outlooks and execution, particularly within the AI and broader tech sectors.

Key Decisions for Investors

• Investors should scrutinize forward-looking guidance as a primary driver of stock performance, as demonstrated by the significant share price movements in HP, Veeva Systems, and SentinelOne based on their outlooks.
• Consider overweighting exposure to companies demonstrating strong execution and positive guidance in high-growth areas like AI, exemplified by Nvidia, C3.ai, and Veeva, while being cautious with firms showing weaker outlooks or specific headwinds.
• Monitor leadership changes, such as the CFO departure at Pure Storage, for potential impacts on company strategy and investor sentiment, even when financial guidance is reaffirmed.
• Acknowledge the bifurcated performance within the technology sector; while AI-related stocks show strength, areas like personal computing (HP) and specific cybersecurity segments (SentinelOne) may face challenges requiring a selective investment approach.