TLDR
- Dell shares jumped 10% after revenue soared 58% year-over-year to $46.97B, driven by AI server demand
- GitLab surged 22% after beating Q2 earnings with 21% revenue growth and strong guidance
- MongoDB fell 15% despite topping expectations, as slower Atlas growth disappointed investors
- Credo Technology dropped 7% despite doubling revenue, as margin pressure spooked traders
- Stock futures were mixed Wednesday as investors tracked bond yields and awaited Federal Reserve data
Dell Technologies kicked off Wednesday’s trading session with a bang. Shares jumped 10% in premarket after the company posted second-quarter revenue of $46.97B, up 58% year-over-year, comfortably beating Wall Street estimates.
The company’s Infrastructure Solutions Group was the star of the show. Revenue there jumped 89% to $31.78B, fueled by demand for AI-optimized servers.
Dell also raised its full-year revenue guidance by $25B to $192B, well above the $173.3B consensus. AI server orders hit a record $60.9B, with a $95B backlog pointing to continued demand ahead.
GitLab Beats Expectations
GitLab was another big winner Wednesday. Shares rose 22% after the software development platform posted Q2 revenue of $286.3M, up 21% year-over-year, beating analyst targets.
Net annual recurring revenue growth came in above 40%, and dollar-based net retention hit 117%. Those numbers eased investor fears about competition from Microsoft’s GitHub and Cursor.
The company guided for Q3 revenue of $281M-$283M, roughly in line with consensus. Management pointed to growing demand as AI tools drive more software creation.
MongoDB and Credo Fell Despite Beats
Not every earnings beat was rewarded Wednesday. MongoDB shares dropped 15% even though the database company reported 30% revenue growth and raised its full-year outlook.
Investors focused instead on slower growth in Atlas, its multi-cloud service. Operating expenses also rose 12%, driven by higher AI and infrastructure costs, which weighed on sentiment.
MongoDB guided for full-year revenue of $2.99B-$3.03B and adjusted earnings per share of $6.39-$6.58, both above consensus, but that was not enough to lift shares.
Credo Technology also fell, dropping 7% despite first-quarter revenue more than doubling year-over-year to $479M. Adjusted earnings per share rose from $0.52 to $1.20.
The issue for Credo was margins. Gross margin narrowed to 64.5% from 67.4% a year earlier, and operating margin slipped to 25.2% from 27.2%. Analysts flagged that guidance looked thin compared to previous quarters.
Credo guided for Q2 revenue of $525M-$535M, above consensus, but also forecast continued margin pressure from rising operating expenses.
Palo Alto Networks edged down 1.7% despite strong fourth-quarter earnings. Shares had run up 97% through Tuesday’s close, and investors chose to take some profit off the table.
Stock futures were broadly mixed Wednesday. Investors were watching for the Federal Reserve’s Beige Book and key economic data releases, while renewed U.S.-Iran military strikes and rising global bond yields kept risk appetite in check.
Broadcom, Snowflake, and Hewlett Packard Enterprise are all set to report earnings after Wednesday’s close.
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