Shares across a broad swath of equities moved higher in midday trading as investors parsed a string of earnings and campaign updates that reinforced AI-driven demand in technology hardware and software. Dell Technologies and HP Inc led the charge, each climbing more than 15% after a blowout quarterly report from Lenovo, a fellow PC maker, stoking optimism about the sector’s cycle. In Hong Kong, Lenovo’s shares jumped roughly 20% as the company disclosed that AI-related revenue rose 84% in the fourth quarter, underscoring the tangible bounty from AI-enabled products and services, CNBC reported.
The session’s action reflects a broader rotation into technology and growth-oriented parts of the market on signs of resilient demand and improving margins, even as regulatory and macro headwinds persist in some corners. Investors appeared to be assessing a mix of earnings momentum, AI demand, and strategic news that could shape the next leg of the cycle for hardware and enterprise software players.
Beyond the Lenovo headline, a slate of other notable moves captured traders’ attention. Estee Lauder rose about 10% after news that talks of a merger with Puig had ended. Workday advanced nearly 4% after posting stronger-than-expected results and lifting its full-year margin outlook; Aneel Bhusri, a co-founder of Workday, returned as CEO during the quarter. Merck climbed close to 5% following data on a lung-cancer treatment developed in partnership with Chinese firm Kelun-Biotech that showed a reduction in tumor progression risk in a phase 3 study. Zoom Communications jumped about 11% after reporting better-than-expected adjusted earnings and revenue, and the company boosted its stock repurchase authorization by $1 billion.
IMAX shares surged about 15% on reports that the company is exploring a sale, with CNBC citing sources who said bankers occasionally test the market for interest. Ross Stores rose roughly 6% after earnings topped expectations and the retailer raised its same-store-sales guidance and full-year earnings outlook. Take-Two Interactive sank about 4% after its full-year bookings guidance missed consensus expectations, though the company reaffirmed that Grand Theft Auto VI remains on track for a November launch.
In China-related trading, Futu’s U.S.-listed shares fell about a quarter after Beijing announced a crackdown on illegal cross-border securities trading. PDD Holdings and Alibaba also declined after the government signaled a crackdown on illicit cross-border activity, with PDD down about 4% and Alibaba down around 1% in the session so far. BJ’s Wholesale Club traded lower by nearly 9% after reaffirming its full-year guidance, which included a per-share earnings range that versus consensus differed slightly. Perpetua Resources turned lower about 4% after an initial rally on news that it secured a $2.9 billion loan from the U.S. Export-Import Bank to fund the Stibnite Gold project, which will also produce antimony for semiconductors and defense applications.
On the semiconductor and electronics side, Advanced Micro Devices rose more than 4% after CEO Lisa Su projected that elevated CPU demand would persist for five years. Arm extended gains, up about 3%, putting it on track for its strongest weekly performance since February 2024. Generac moved about 9% higher after Jefferies upgraded the stock to buy from hold, arguing that the data-center buildout could be a catalyst not yet priced into shares.
Key takeaways
- Price move: Dell Technologies and HP Inc rose more than 15% as Lenovo’s results stoked AI demand expectations; Lenovo’s Hong Kong shares jumped about 20% on robust AI revenue growth.
- Catalyst: Lenovo’s 84% AI-related revenue growth in Q4 highlighted AI tailwinds for hardware players; IMAX’s potential sale and several earnings beats provided additional near-term catalysts.
- Market implication: The session suggests ongoing rotation into tech hardware and enterprise software amid improving visibility on demand and margins, even as cross-border trading scrutiny in China adds a degree of regulatory risk for U.S.-listed Chinese stocks.
- Other notable moves: Mixed earnings and guidance drove varied outcomes across retailers, gaming, and energy-adjacent names, underscoring a broad risk-on tilt with selective stock-specific catalysts.
- Macro backdrop: Investors remain focused on AI-driven demand cycles, corporate earnings resilience, and regulatory developments that could affect cross-border trading and capital flows.
What drove the shift was a combination of company-specific earnings momentum and the broader AI narrative that has re-accelerated demand for computing hardware, software-as-a-service platforms, and related services. Lenovo’s disclosure of 84% AI-related revenue growth in Q4 provided a concrete data point that investors could anchor on, reinforcing hopes that the AI cycle may sustain a higher level of investment across the technology stack. While Lenovo’s numbers were the spark, the price action reflected a broader re-pricing in technology equities—particularly among PC makers and related equipment suppliers—to reflect the potential for durable earnings upgrades amid ongoing AI adoption.
Market participants also weighed company-specific developments. Zoom’s stronger quarterly results and expanded buyback plan helped lift sentiment in the communication and software space, while Merck’s phase 3 data added a ray of optimism for new cancer therapies during a period of steady pharmaceutical pipeline activity. In the consumer sector, Estee Lauder’s lift on merger-talk resolution underscored how strategic deals can influence stock trajectories even when the broader market environment remains uneven.
For investors, the day’s action underlines several practical takeaways. First, AI-driven demand remains a meaningful driver for valuation in hardware and software equities, particularly for firms positioned to capitalize on data-processing, cloud, and edge-computing trends. Second, regulatory developments in China—especially around cross-border trading—continue to inject a source of dispersion into U.S.-listed Chinese names, making stock-specific risk assessment even more important. Third, earnings momentum across a range of sectors—semiconductors, gaming, and consumer discretionary—can coexist with mixed guidance, reinforcing the need for selective stock picking and attention to guidance revisions as companies update their outlooks.
CNBC’s coverage highlighted the breadth of the moves, with additional reporting noting the intensity of U.S.-listed Chinese equities’ reactions to policy signals, and the ongoing scrutiny of cross-border activity. The market’s response to Lenovo’s AI-focused push and related corporate news suggests traders are pricing in a longer horizon for AI-driven growth, rather than a short-term spike. As always, the path forward will hinge on ongoing earnings updates, the durability of AI demand across product cycles, and the trajectory of regulatory developments that influence cross-border capital flows.
What to watch next: investors will scrutinize upcoming quarterly results from hardware and software peers for signs of sustained AI demand, any guidance revisions that reflect a shifting demand mix, and new regulatory or policy developments that could alter the risk-reward profile for U.S.-listed peers with significant exposure to Chinese markets. As earnings season progresses, market participants will seek confirmation of whether this week’s rotation signals the beginning of a broader trend or a window of temporary optimism.
