Technology investors did not hesitate to punish companies that posted weak results from sales related to artificial intelligence.
Hewlett Packard Enterprise (HPE) lost 20.17% last week. The firm engaged in aggressive competitive pricing. As a result, it is forecasting earnings per share of $0.28 - $0.34. This is below Wall Street’s average estimate of nearly $0.50. Revenue of as low as $7.2 billion is below the nearly $8 billion estimate.
CEO Antonio Neri cited tariffs on imports from Mexico and Canada as a reason for the weak guidance.
Last week, shares of Costco (COST) and Walmart (WMT) fell by 8.04% and 6.99%, respectively, in the retail sector. Valuations caught up to those firms. While tariff uncertainties are to blame, investors are growing increasingly risk-adverse. They are no longer willing to pay a premium for the top retail U.S. firms. COST stock could find support at around $900. This is a low not seen since November 2024.
Walmart shares are still in an uptrend. The firm has a resilient long-term business model. For example, the firm consolidated its e-commerce systems, creating a common technology platform. That would increase efficiency and cut costs.
Walmart will roll out this solution to Mexico, Canada, Chile, and China. It learned from Flipkart’s operations in India. As a result, it will incorporate those lessons learned into its U.S. operations.
