Two of the biggest reports of the week landed within ten minutes of each other Wednesday afternoon, and the market's reaction tells you almost everything about where investor patience currently sits.
Snowflake (SNOW) beat on every line and raised the full-year bar by a quarter of a billion dollars. Broadcom (AVGO) grew total revenue 86% and its AI semiconductor business 221% year over year — and the stock fell.
Same tape, same AI theme, opposite outcomes. The difference was not the results. It was the gap between the results and what was already priced in.
Snowflake put up its third straight quarter of acceleration
Snowflake's fiscal Q2 2027 numbers, released after Wednesday's close:
Total revenue of $1.55 billion, up 35% year over year
Product revenue of $1.49 billion, up 37% — the third consecutive quarter of accelerating product revenue growth
Adjusted EPS of $0.62 versus the $0.45 consensus compiled by LSEG — a 38% beat
Net revenue retention of 126%, and 828 customers generating more than $1 million in trailing-twelve-month product revenue, up 27%
Remaining performance obligations of $9.00 billion, up 30%
The guidance is what moved the stock. Snowflake raised its full-year product revenue outlook to $6.07 billion, up 36%, from the prior $5.84 billion and 31% growth — a $230 million increase in a single quarter. Fiscal Q3 product revenue is guided to $1.588–1.593 billion, implying 37–38% growth, faster still.
CFO Brian Robins: "Q2 marks our third consecutive quarter of product revenue growth acceleration, driven by strength in both our core data platform and a meaningful step-up in AI revenue."
Acceleration is the rare thing here: most large software companies decelerate as their revenue base grows. Wall Street responded in kind. The stock opened Thursday roughly 24% higher. Morgan Stanley's Sanjit Singh, who rates the shares overweight, took his price target from $300 to $470, writing that a "third straight [quarter] of acceleration against a tough compare + high expectations underscore just how well AI is monetizing and driving greater consumption in the core platform." Bank of America's Koji Ikeda raised his target from $395 to $470 as well, noting that "the key debate into the print was whether Product revenue could keep accelerating. It did." Forty-six of the 52 analysts covering the name now rate it a buy or strong buy, and it entered Thursday up 39% on the year — the kind of move that also shows up in the names Wall Street has been upgrading this week.
Broadcom's numbers were arguably better. The stock fell.
Ten minutes after Snowflake's release, Broadcom posted fiscal Q3 results that were, on an absolute basis, extraordinary:
Revenue of $29.6 billion, up 86% year over year
AI semiconductor revenue of $16.7 billion, up 221% year over year and 54% sequentially
Non-GAAP operating income of $20.1 billion
Non-GAAP diluted EPS of $3.32
Free cash flow of $13.7 billion — 46% of revenue
CEO Hock Tan guided even higher: "In Q4 the momentum continues, and we expect AI semiconductor revenue to accelerate to $21.7 billion, up 236% year-over-year."
And the stock fell 2.5%. The reason sits in two decimal points. Broadcom guided total Q4 revenue to roughly $34.8 billion against a $35.03 billion consensus, and a non-GAAP operating margin near 66% against 66.5% expected. Against an 86% growth rate, a $230 million revenue shortfall to consensus is a rounding error. Against a stock already priced for something closer to perfection — the dynamic Pets.com taught an earlier generation of investors about — it is a reason to take profits.
That is the pattern worth internalizing. Absolute growth no longer clears the bar; growth relative to the number already embedded in the price does. Snowflake beat a low bar and accelerated. Broadcom beat a very high one and merely met the next.
Ciena posted the cleanest numbers of the week and fell hardest
Ciena (CIEN) reported fiscal Q3 Thursday morning with the sharpest year-over-year swing in the group:
Revenue of $1.67 billion, up 37% from $1.22 billion
Adjusted EPS of $2.11 versus $0.67 a year ago — up 215%
Adjusted gross margin of 46.4%, up from 41.9%; adjusted operating margin of 22.5%, up from 10.7%
Full-year fiscal 2026 revenue guidance raised to $6.42 billion ±$50 million — roughly 35% growth at the midpoint
Networking Platforms generated $1.36 billion, or 81% of revenue, with optical alone at $1.19 billion. CEO Gary Smith called the results evidence of Ciena's leadership "as AI continues to drive compounding waves of network investment."
The stock fell 10.4%.
The through-line across Snowflake, Broadcom, Ciena and Dell's record $60.9 billion in AI server orders last week is that the spending is real and still compounding. What is no longer reliable is the stock reaction to it.
Thursday night's reports split the same way
lululemon (LULU) delivered the quarter the market feared. Fiscal Q2 revenue fell 4% to $2.42 billion against $2.46 billion expected, with comparable sales down 9% — down 12% in the Americas. Diluted EPS was $2.92 versus $3.10 a year ago, and that figure included $134.5 million of IEEPA tariff refunds worth 560 basis points of gross margin and $0.86 of EPS. Strip those out and the quarter was materially weaker.
The guidance was the bigger problem. lululemon cut full-year revenue to $10.35–10.50 billion, a 5% to 7% decline, from $11.00–11.15 billion previously, and full-year EPS to $9.48–9.73 from $10.95–11.15. Third-quarter revenue is guided down 10% to 11%. Interim Co-CEO and CFO Meghan Frank said the company is "taking a prudent approach" while navigating "some challenging dynamics." Shares closed the regular session at $121.77, up 1.42%, then fell roughly 18% in extended trading to about $99.85. Incoming CEO Heidi O'Neill takes over next week.
Zscaler (ZS) beat and barely moved. Fiscal Q4 revenue rose 25% to $898.2 million against roughly $877 million expected, with adjusted EPS of $1.19 versus $1.09 estimated. ARR reached $3.771 billion, up 25% on $246 million of net new ARR — 20% excluding the Red Canary acquisition. Non-GAAP operating margin hit a record 24%.
The fiscal 2027 guide was the number everyone was waiting on after May's 31% single-day decline: revenue of $3.908–3.938 billion, or 16.6% to 17.5% growth. That confirms the step down from 25% rather than reversing it. The stock closed at $177.80, up 2.94%, and was up just 0.30% in extended trading.
Where the tape closed
Thursday was the strongest session in a month, driven by falling yields after Fed Governor Christopher Waller signaled he is leaning toward holding rates steady at the September meeting.
S&P 500: 7,747.71, up 81.11 points, or 1.06%
Dow Jones Industrial Average: 53,686.11, up 624.16 points, or 1.18% — its best day in a month
Nasdaq Composite: 26,584.06, up 366.23 points, or 1.40%
10-year Treasury yield: roughly 4.76%, down from 4.79% Wednesday, when it had touched its highest level since 2023
Crude oil eased after this week's geopolitical spike
Single names told the story of the AI split: Snowflake closed at $356.47, up 16.55%, on volume of 20.3 million shares and a new 52-week high of $384.56 intraday. Broadcom closed at $357.16, down 2.74%. And Ciena — with the largest year-over-year earnings improvement of the three — closed at $317.46, down 10.36% on 6.7 million shares.
The data underneath the tape
Thursday's economic releases were mixed in a way that keeps the Federal Reserve firmly in play:
Initial jobless claims of 206,000 for the week ended August 29, against 205,000 expected. Continuing claims rose 8,000 to 1.779 million.
ISM Services came in at 55.4, the strongest since February — but the survey's prices component hit a four-year high.
Wednesday's ADP report showed just 38,000 private jobs added in August, the weakest since January and below the 48,000 consensus. Manufacturing shed 17,000 positions.
A strengthening services economy with accelerating input prices and a visibly softening labor market is what makes the September 15–16 FOMC meeting genuinely uncertain. Fed Chair Kevin Warsh has noted that twelve-month PCE inflation is running at 3.7% and that the Fed has "more work to do." Odds of a September hike ran in the 56% to 66% range earlier this week; after Waller's comments Thursday they slipped to roughly 50%.
What lands next
Friday, 8:30 a.m. ET: August nonfarm payrolls. Consensus sits near +56,000 to +58,000 after July's outright decline of 23,000, with unemployment expected to hold at 4.1%. The forecast dispersion is unusually wide — Fifth Third's Bill Adams looks for −25,000, Wells Fargo for +80,000.
That is the last major labor data point before the Fed meets. A print near consensus leaves the decision a coin flip. A negative print, or a jump in the unemployment rate, takes a hike off the table. A number above 80,000, paired with Thursday's four-year high in services prices paid, hands the hawks their case.
Position sizes matter more than opinions into a release with that much spread around it.
This article is for informational and educational purposes only and does not constitute investment advice or a recommendation to buy or sell any security.
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