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 missing headline expectations, the world's second-largest software infrastructure stock, Oracle $ORCL, had a +12.13 reaction score.
They posted revenues of $14.93B, versus the expected $15.04B, and earnings per share of $1.47, versus the expected $1.48.
Following a double miss, the $72B software infrastructure stock, Synopsys $SNPS, had a -10.92 reaction score.
Their report showed revenues of $1.74B, versus the expected $1.77B, and earnings per share of $3.39, versus the expected $3.80.
Wednesday was one of the wildest days of this earnings season, with two AI stocks having completely polar opposite earnings reactions with double-digit reaction scores. Days like that are very rare.
Now let's dive into the fundamentals and technicals 👇
ORCL had its best earnings reaction ever 🔥
Oracle skyrocketed 36% after this earnings report, and here's what happened:
Remaining performance obligations (RPO) surged 359% year-over-year to $455B, fueled by major multi-billion-dollar cloud contracts. This financial metric represents the total value of contracted future revenue that the company is obligated to deliver to customers but hasn’t yet recognized as revenue.
During the quarter, cloud revenue increased by 28%, and cloud infrastructure revenue surged 55%.
In addition to the great quarter, the management team boosted its forward guidance, expecting nearly 80% growth in cloud infrastructure revenue for the foreseeable future.
In Sunday's Weekly Beat column, we highlighted that this company has consistently missed Wall Street's top-line expectations, but shareholders have been rewarded for it.
We also said this stock has tremendous power in the new AI Revolution, and we expect another blockbuster quarter and a positive earnings reaction.
Despite our bullish stance, this post-earnings reaction blew our socks off. This was hands-down the best S&P 500 earnings reaction we've seen this entire season!
Wednesday's move reminded us of Nvidia's $NVDA earnings reaction in May of 2023, which led to the stock becoming the largest in the world.
Now, we think this company should be considered a Magnificent 7 name. It's a powerhouse, and we expect it to be a leader for years to come.
If ORCL can hold above 327, we think it's going to 455.
SNPS had its worst earnings reaction ever 🐻
Synopsys crashed 35.8% after this earnings report, and here's what happened:
The market panicked when the company announced a major foundry had reduced orders or pulled out of some expected commitments. With sky-high expectations, this shock triggered a surge in selling pressure.
Adding to the frenzy was the announcement of an indefinite freeze of the share repurchase program.
As the cherry on top, the management team's guidance on free cash flow came in significantly lower than anticipated.
This was the stock's worst day ever, marking a significant blow to what had previously been a leader in the AI Revolution.
Opposite of Oracle, this was hands-down the worst S&P 500 earnings reaction we've seen this entire season!
As The Chart Report highlighted yesterday, the stock is testing the volume-weighted average price (VWAP) anchored to the Covid lows, around 400. This level has already served as support 3 times since the pandemic, but the price closed slightly below it yesterday.
Reclaiming it would be the first step toward a meaningful rebound, but sellers remain in control below this key level of interest.
We're also watching the year-to-date low around 365 as a potential level of support.
Wednesday was a bull killer for SNPS. The path of least resistance is sideways to lower for the foreseeable future.
Stay safe out there
-The Beat Team
P.S. Have you seen what's happening in crypto? They're ripping and we think it's time to be all-in again.
Ripple $XRP is one of our favorite charts in the space, and we outlined the key levels yesterday.
There are a lot more setups like this, so make sure you join Louis and Steve on Friday. They're going to run through all of the best names.
