AI Infrastructure Stocks Surge as Earnings Beat Expectations
Investors favored AI and data infrastructure leaders as Credo, Ciena and NetApp posted standout growth and margins. But the week also showed how unforgiving the market can be: Guidewire and Lululemon fell sharply despite beating EPS estimates, while Snowflake and HPE slipped after solid results.
AI and data infrastructure names led the week as investors rewarded strong revenue growth, margin expansion, and rising demand tied to data center and enterprise AI buildouts. Credo, Ciena, and NetApp all posted standout results, while Guidewire and Lululemon showed that an earnings beat alone was not enough to protect valuations when guidance or sentiment disappointed.
The week of September 1 through September 3, 2026, showed investors rewarding strong AI and data infrastructure execution while punishing even profitable software and consumer names when the outlook or valuation story lost momentum. Credo Technology Group Holding Ltd (CRDO), Ciena Corporation (CIEN), and NetApp (NTAP) delivered powerful operating numbers, while Guidewire Software (GWRE) and Lululemon Athletica (LULU) suffered sharp share-price declines.
Key Takeaways
Credo reported $479 million in revenue, up more than 2x year over year, while adjusted gross margin reached 68%.
Ciena posted record revenue of $1.7 billion, up 37% year over year, with adjusted operating margin of 22.5%.
NetApp grew revenue 30% year over year to $2.03 billion and lifted EPS 66% from the prior-year quarter.
Samsara's ARR passed $2.1 billion, while customers with at least $100,000 in ARR grew 38% year over year.
Guidewire and Lululemon both beat EPS estimates, yet their shares fell 19.93% and 17.38%, showing that earnings beats alone did not protect stocks from a harsh market response.
Credo Technology Group Holding Ltd (CRDO)
Credo led the week with a strong mix of growth, profitability, and operating leverage. First-quarter fiscal 2027 EPS came in at $1.20, ahead of the $1.17 estimate. Revenue reached $479 million, rising 10% sequentially and more than doubling year over year. Non-GAAP gross margin was 68%, while non-GAAP net income exceeded $236 million, up 140% year over year.
The market rewarded the results. CRDO rose 3.90% to $170.57, and volume reached 10.61 million shares against a 7.55 million average. The analyst backdrop also remained favorable, with 14 buy ratings and two holds, producing a buy consensus.
On the earnings call, CEO William J. Brennan emphasized that Credo has been growing at a pace achieved by very few semiconductor companies. The company focuses on high-speed connectivity products, including active electrical cables, integrated circuits, and SerDes technology. That product mix gives the growth story a direct connection to expanding data center bandwidth needs, while the 68% gross margin shows that growth is not arriving at any price.
NetApp (NTAP)
NetApp delivered one of the week's clearest earnings beats. Fiscal first-quarter EPS was $2.58, compared with a $2.12 estimate. Revenue increased 30% year over year to $2.03 billion. Gross profit rose 29% to a record $1.43 billion, operating margin reached 31.9%, and EPS increased 66% from the same quarter a year earlier.
Despite the strong figures, NTAP finished nearly flat at $185.59, up 0.11%. Volume of 2.25 million shares was below the 2.74 million average. The muted response fits the analyst split: 26 buys, 37 holds, and eight sells, with a hold consensus.
NetApp's call pointed to multiyear agreements, new workloads, deeper customer engagement, accelerated purchase decisions, and pricing benefits. CEO George Kurian also described a structural improvement in the underlying demand environment. Those details give the revenue growth more weight than a single quarter's purchasing surge, although the stock reaction shows that the market already demands evidence of durable execution.
Get AI research on any stock
Instant reports, daily intelligence, and an AI analyst in your pocket.
Snowflake produced an EPS beat in its second quarter of fiscal 2027. EPS was $0.62 versus an estimate of $0.4468. The stock, however, fell 5.41% to $337.18. Trading volume reached 8.43 million shares, above the 5.69 million average, adding weight to the negative session.
Analysts still leaned positive after the report. Snowflake carried 43 buy ratings, nine holds, and one sell, resulting in a buy consensus. That support reflects the company's position in cloud data management and its growing role in enterprise AI workflows.
CEO Sridhar Ramaswamy framed Snowflake around the agentic enterprise. He described a platform built around governed data, access to leading AI models, application workflows, and a control plane that coordinates those pieces. The strategy gives Snowflake a large growth narrative, but the share-price decline shows that investors still measure the story against demanding expectations. In markets, a good business and a good short-term trade remain separate concepts.
Hewlett Packard Enterprise (HPE)
Hewlett Packard Enterprise also beat its EPS estimate. Fiscal third-quarter EPS reached $1.11, compared with an estimate of $0.932. HPE shares fell 4.48% to $52, with volume of 29.95 million shares versus a 21.47 million average.
The analyst view remained constructive but divided. HPE had 19 buy ratings, 19 holds, and one sell, producing a buy consensus. The nearly even split between buys and holds reflects a business with established scale, but also a market that wants more than a single EPS beat.
HPE's fiscal 2026 third-quarter call described another set of record financial results and said the company's strategy was proving itself again. The call also stated that the discussed EPS figures were non-GAAP diluted net earnings per share. HPE's hardware, networking, storage, and services portfolio gives it exposure to enterprise infrastructure spending, yet the negative share reaction shows that investors focused on the gap between a solid quarter and the stock's forward expectations.
Ciena Corporation (CIEN)
Ciena delivered record results in fiscal third-quarter 2026. EPS was $2.11, above the $1.73 estimate. Revenue reached $1.7 billion, up 37% year over year. Adjusted operating margin was 22.5%, more than double the prior-year level and above company guidance. Adjusted EPS increased 215% year over year to a record.
CIEN rose 1.12% to $321, with 3.33 million shares traded against a 2.65 million average. Analysts remained firmly positive, with 32 buys and 10 holds and no sell ratings. The consensus was buy.
CEO Gary Smith called the quarter a record across the board. The combination of 37% revenue growth and a 22.5% adjusted operating margin makes Ciena's result more than a top-line beat. It shows strong conversion of demand into profit. Ciena's networking equipment and services support the infrastructure behind rising data traffic, giving its earnings profile a direct link to long-term connectivity investment.
Samsara (IOT)
Samsara's second-quarter fiscal 2027 EPS was $0.20, ahead of the $0.16 estimate. The company also crossed $2.1 billion in annual recurring revenue, up 30% year over year, supported by $134 million in net new ARR. Customers generating at least $100,000 in ARR represented $1.3 billion, up 38% year over year.
The market response was positive. IOT gained 3.74% to $40.20, while volume surged to 25.49 million shares from a 6.05 million average. Analyst sentiment was also strong, with 15 buys and five holds for a buy consensus.
Samsara added 242 customers with at least $100,000 in ARR and 20 customers with at least $1 million in ARR, both quarterly records. The company also surpassed 30 trillion data points collected annually, up more than 40% year over year. These metrics reinforce the scale of its connected operations platform across vehicles, equipment, job sites, and frontline workers.
Like what you're reading?
Get full access to AI-powered research reports, market analysis, and portfolio tools.
Guidewire finished fiscal 2026 with an EPS beat. Fourth-quarter EPS was $0.99, compared with an estimate of $0.933. Annual recurring revenue ended at $1.242 billion, up 19% year over year and above the high end of guidance. Fully ramped ARR grew 22%, while subscription and support revenue increased 33%.
The stock delivered the week's harshest software reaction. GWRE fell 19.93% to $162.42, and volume reached 4.70 million shares versus a 1.54 million average. Analysts still listed 19 buys, six holds, and one sell, with a buy consensus.
Guidewire said it exceeded expectations across revenue, operating income, and cash flow. CEO Mike Rosenbaum also highlighted the durability of the business model and its position in the AI-driven transformation of property and casualty insurance. The sharp selloff against those figures marks a classic expectation reset: strong operating results did not outweigh the market's demand for a stronger forward setup.
Lululemon Athletica (LULU)
Lululemon posted second-quarter fiscal 2026 EPS of $2.92, well above the $1.79 estimate. The stock still dropped 17.38% to $100.61, with 37.19 million shares traded against a 4.03 million average.
Analyst sentiment was more cautious than at the technology names. LULU had 28 buy ratings, 36 holds, and seven sells, producing a hold consensus. The earnings call featured interim co-CEOs Meghan Frank and Andre Maestrini, adding a leadership transition element to the quarter's market narrative.
The result shows why consumer stocks often face a higher bar than their EPS estimates. Lululemon delivered the reported profit number, but the stock reaction was dominated by the broader expectations surrounding growth, leadership, and brand momentum.
Wrap-Up
This week's earnings recap favors companies converting infrastructure demand into revenue and margin growth, led by Credo, Ciena, NetApp, and Samsara. However, Snowflake, Guidewire, HPE, and Lululemon showed that EPS beats do not guarantee positive stock performance when valuations and forward expectations remain demanding.
▌Common Questions
Frequently asked questions
+Why did AI infrastructure stocks rise after earnings this week?
Investors rewarded companies that showed accelerating revenue growth, strong margins, and clear demand tied to data center and AI infrastructure spending. Credo, Ciena, and NetApp all delivered results that reinforced the durability of their growth stories.
+What did Credo Technology report in its latest earnings?
Credo reported fiscal first-quarter 2027 revenue of $479 million, more than doubling year over year, with adjusted gross margin of 68%. EPS came in at $1.20, above estimates, and the stock rose after the report.
+Why did NetApp stock barely move after a strong earnings beat?
NetApp posted a major EPS and revenue beat, but the market response was muted because expectations were already elevated and the analyst view was mixed. Investors appear to want proof that the growth acceleration is durable beyond one quarter.
+Why did some stocks fall even after beating EPS estimates?
A beat on earnings was not enough to offset concerns about valuation, guidance, or the market's expectations for future growth. That is why names like Guidewire, Lululemon, Snowflake, and HPE sold off despite reporting better-than-expected results.
▌The Daily Briefing · Free
A new stock idea, every evening.
One stock worth watching each weekday, plus the analysis behind it. Free, in your inbox.
