HPE Stock Dips Premarket, SNOW Rallies After Earnings: Morningstar Calls Both Reports ‘Extraordinary’

• Morningstar lifted its price targets for both companies, citing stronger AI-driven growth and margin opportunities.
• Snowflake’s results highlighted accelerating enterprise AI demand, though Morningstar warned competition could intensify as agentic AI enthusiasm cools.
• HPE’s results showed AI spending broadening into servers, networking and hybrid cloud.

Snowflake and Hewlett Packard Enterprise delivered strong quarterly reports, but investors reacted very differently, with Snowflake shares surging 24% premarket on Thursday while HPE stock fell about 5%. 

Morningstar analysts nonetheless raised their price targets for both companies, citing stronger AI-driven growth prospects.

Snowflake’s second-quarter revenue rose 35% to $1.55 billion, beating expectations, and the company raised its full-year revenue forecast.

Morningstar raised its target on SNOW to $284 from $255, citing stronger AI tailwinds that should benefit both revenue growth and margins. However, the firm cautioned that the company’s recent outperformance is driven primarily by the broader enterprise AI market rather than a unique competitive advantage.

“Shares shot up 23% after earnings and look overvalued to us,” Morningstar said, warning that competition could intensify as enthusiasm around agentic AI eventually fades.

HPE, meanwhile, reported fiscal third-quarter revenue of $9.2 billion, up 34%, and also raised its annual forecast, following a similarly strong report by rival Dell Technologies earlier this week.

Morningstar analysts said the results show AI demand is spreading beyond specialized AI infrastructure into HPE’s broader portfolio, including hybrid cloud, general-purpose servers, and networking. The firm also pointed to HPE’s recent Oracle deal combining Juniper networking products with other hardware for a multigigawatt buildout.

Despite the stock’s selloff, Morningstar raised its HPE target to $66 from $64. “We thought earnings were solid and are a bit surprised by the after-hours selloff and view shares as undervalued,” the analysts said.

Retail View On HPE, SNOW

On Stocktwits, the retail sentiment for SNOW increased to nearly the highest-possible in the ‘extremely bullish’ zone (97/100), and the sentiment for HPE also climbed sharply higher to ‘extremely bullish’ (92/100).

“$HPE Now trading at a single digit P/E of 9 and change after that beat and raise. One of the best values right now in the AI hardware space with phenomenal management and consistent execution. I sure hopes it opens around this price tomorrow as I'll be opening some long dated bull call spreads,” a trader said.

There was skepticism around SNOW. A trader wrote: “$SNOW Almost 25% in AH. This is just, i mean. wow. I don't really buy short positions. But im seriously considering it.”

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