This "boring" old tech stock just had its best earnings reaction ever. Here's why it matters...
June 1, 2026
In last Sunday's Weekly Beat, we previewed two earnings reports with two very different setups.
One was a former old-tech laggard that had reinvented itself as a critical player in the AI infrastructure buildout, broken out from a massive base, and started trading like a market leader.
The other was one of the best retailers on planet Earth, a company with elite membership economics, world-class customer loyalty, and a long history of rewarding shareholders, but also a chart that was beginning to send a very different message.
By Friday’s close, the market had made the distinction impossible to ignore.
Dell Technologies $DELL exploded higher by 32.8% after reporting a monster double beat, marking the best earnings reaction in the stock’s history and sending shares to fresh all-time highs.
Meanwhile, Costco $COST fell 3.9% after reporting mixed results, confirming the failed breakout we warned about in last week’s Weekly Beat.
The numbers tell us what happened inside the business, but the reaction tells us how much of that good news was already priced in, where expectations are too high, and where investors are still willing to chase.
On Friday, the message was clear that the market still wants AI infrastructure and is showing far less patience for crowded defensive trades.
*Click the image to enlarge it
On Friday, NetApp $NTAP had the best reaction score, while Dell was right behind it.
Those were votes of confidence in the hardware, storage, and infrastructure names tied directly to the AI buildout.
On the other side of the sheet, Autodesk $ADSK fell 4% despite beating estimates, while Costco dropped 3.9% after missing revenue expectations and beating on earnings.
Investors are rewarding companies with the best combination of technicals, fundamentals, and earnings sentiment, and punishing stocks where expectations have gotten too heavy.
Right now, Dell checks every box.
We wrote last week that Dell was one of our favorite ways to express a bullish thesis on AI infrastructure beyond the obvious mega-cap semiconductor names.
The stock had already broken out from a massive accumulation pattern, doubled in a matter of months, and continued to print fresh all-time highs.
In other words, the chart already showed that buyers were in control before the company ever opened its books.
And then Dell reported after Thursday's closing bell...
The company delivered record revenue of $43.84 billion, up 88% YoY, while non-GAAP EPS surged 214% over the same period.
In the report, the AI server business was the real growth engine, with AI-optimized server revenue up 757% YoY, and management exited the quarter with a record $51.3 billion AI backlog.
And as a result, Dell ripped to new all-time highs, logged its best earnings reaction ever, and confirmed that the breakout earlier this year was the beginning of a major re-rating, backed by a fundamental acceleration that is hard to overstate.
So long as Dell continues making new all-time highs, this is not a trend we want to fight. This is a market leader, and Friday’s reaction only made that leadership harder to ignore.
On the other hand, Costco is a different story...
Costco remains one of the best operators in retail, with a loyal membership base, a strong value proposition, and a model that continues to perform well even in a messy consumer environment.
During the quarter, the company grew net sales by 11.6% YoY, while comparable sales rose 9.8% over the same period.
Digitally enabled comparable sales were even stronger, rising 21.5% YoY.
The numbers weren't bad at all...
The problem is that Costco’s stock was priced for something better, and the chart had already started to warn us that buyers were losing control beforethe report.
Heading into the print, COST was beginning to roll over after failing to hold its breakout to new all-time highs.
That left behind a textbook bull trap at a major level of interest, which is exactly the kind of setup where a disappointing reaction can turn a small problem into a much bigger one.
And that is what happened on Friday.
So long as COST remains below $1,078, the failed breakout is the dominant technical feature on the chart, and the path of least resistance is sideways to lower until buyers prove otherwise.
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Cheers to a new month!
-The Beat Team
Editor's Note: Most investors won't pay attention until this trend is obvious.
