What we heard
Information Technology
HPE and Broadcom warned that surging GPU demand for High Bandwidth Memory is straining broader memory supply and capping server shipments. It shows AI infrastructure bottlenecks spilling over from compute silicon into system-level memory allocation.
Traditional server revenue surged at Dell (+122%) and HPE (+35%) on higher average selling prices, despite unit supply constraints. Enterprise data center refreshes are generating substantial non-AI revenue growth while market attention remains fixed on GPUs.
AI
Snowflake cut its full-year product gross margin target to 74% because fast-growing AI workloads carry lower contribution margins. It offers concrete evidence that early enterprise AI adoption can dilute software gross margins.
Consumer Discretionary
Lululemon’s signature leggings sales dropped roughly 20% in Q2 as consumer preferences pivoted decisively to looser silhouettes. The abrupt fashion rotation shows how quickly category-defining athleisure staples can lose volume and pricing power.
Copart agreed to acquire ACV, absorbing an asset-light marketplace selling 800,000 dealer vehicles annually with virtually no physical land footprint. The transaction expands the salvage yard leader directly into mainstream dealer-to-dealer wholesale auctions.
Consumer Staples
Brown-Forman noted that 19 of 20 Nielsen spirits categories are contracting, with U.S. whiskey and tequila suffering the steepest declines and only ready-to-drinks growing. It signals a broad-based structural hangover across mainstream spirits rather than isolated brand weakness.
In detail
Information Technology
HPE and Broadcom warned that surging GPU demand for High Bandwidth Memory is straining broader memory supply and capping server shipments. It shows AI infrastructure bottlenecks spilling over from compute silicon into system-level memory allocation.
Accelerating accelerator adoption is reallocating clean room and wafer fabrication resources toward specialized high-bandwidth architectures rather than conventional DRAM. Because non-AI server platforms depend strictly on standard dynamic memory, manufacturing shifts toward specialized stacks create system-level procurement constraints across the broader hardware ecosystem. Buyers assembling artificial intelligence clusters must simultaneously source complementary system memory alongside specialized accelerators. Whether these bottlenecks ease will depend on how foundries balance clean room floor space and wafer lines between competing memory architectures, and how quickly enterprises navigate component procurement beyond primary compute silicon.
But in the memory space, you also have another trend underneath that obviously is driven by the technology shift. We had DDR4 to DDR5, that’s understood, but then you have traditional DRAM moving to HBM. And that HBM demand is super high because it’s driven by the GPU and the better memory that comes with it. So this is why you have to look at this wafer capacity, clean room capacity and then eventually the mix of what type of memory will be used and demanded as we go forward. Now in the traditional server, we use DRAM. We don’t use HBMs. And so that’s where we are focused very extensively. On
HPE — Antonio Neri, President and Chief Executive Officer (FY2026-Q3) — read it in the call
we all know about memory, HBM memory, and beyond HBM memory, the system memory that goes into AI servers, which we don’t supply necessarily, but our customers have to secure too.
AVGO — Hock Tan, President and CEO (FY2026-Q3) — read it in the call
Traditional server revenue surged at Dell (+122%) and HPE (+35%) on higher average selling prices, despite unit supply constraints. Enterprise data center refreshes are generating substantial non-AI revenue growth while market attention remains fixed on GPUs.
Data center spending is experiencing significant momentum outside specialized accelerator clusters, driven by enterprise refresh cycles and infrastructure upgrades. Organizations are updating existing compute fleets to handle traditional enterprise workloads while responding to heightened requirements around infrastructure resiliency and security. Furthermore, emerging agentic workflows and artificial intelligence tasks are generating substantial demand for central processing unit capacity alongside graphics processors. Pricing increases have played a critical role in driving top-line revenue expansion, offsetting restricted unit availability as enterprise customers modernize core infrastructure across both legacy systems and emerging compute architectures.
Moving to traditional servers. Revenue was up 122% as demand remains exceptionally strong, supported by multiple vectors of growth. First, a majority of our growth is coming from existing customers as they continue to refresh and modernize their data centers to support traditional workloads. Heightened security and resiliency requirements are also creating incremental demand as customers modernize their infrastructure. Second, we are seeing a growing trend of customers that require meaningful CPU compute capacity to support AI and agentic workflows. These workloads are creating incremental dem
DELL — Jeffrey Clarke, CEO (FY2027-Q2) — read it in the call
Server revenue growth of 35% accelerated sequentially as strong ASP growth in traditional servers offset supply-constrained unit volumes.
HPE — Marie Myers, Chief Financial Officer (FY2026-Q3) — read it in the call
AI
Snowflake cut its full-year product gross margin target to 74% because fast-growing AI workloads carry lower contribution margins. It offers concrete evidence that early enterprise AI adoption can dilute software gross margins.
The financial profile of enterprise software is shifting as customer consumption pivots toward fast-growing artificial intelligence features. Because these newer compute workloads currently deliver lower contribution margins than traditional software capabilities, rapid adoption alters overall profitability even as product usage accelerates. This dynamic directly impacts how software providers manage pricing models and underlying operational expenses as artificial intelligence makes up an expanding fraction of total product revenue. Gross margins will remain pressured unless operational efficiencies improve on these workloads or the revenue mix rebalances toward higher-margin traditional applications over upcoming fiscal quarters.
For FY 2027, we now expect 74% non GAAP product gross margin. This revised outlook includes a higher revenue mix from fast growing AI workloads which carry a lower contribution margin today.
SNOW — Brian G. Robins, Chief Financial Officer (FY2027-Q2) — read it in the call
Consumer Discretionary
Lululemon’s signature leggings sales dropped roughly 20% in Q2 as consumer preferences pivoted decisively to looser silhouettes. The abrupt fashion rotation shows how quickly category-defining athleisure staples can lose volume and pricing power.
A major shift in apparel design is testing brand flexibility as consumer interest pivots away from tight-fitting activewear. While alternative away-from-body silhouettes are generating positive commercial traction, replacement volumes remain insufficient to counteract the steep drop in foundational bottom-wear categories. The divergence highlights how quickly core franchise items can lose customer enthusiasm when silhouette preferences evolve across the market. Stabilizing top-line performance will depend on how effectively the broader assortment can ramp up production in loose-fitting styles to fully compensate for ongoing contraction in legacy product lines.
Leggings trends so far this year have been below our expectations, with sales declining approximately 20% in Q2. While we have been planning into lower legging sales, and we are seeing good traction in several of our away-from-body styles, we are not yet able to fully offset these declines.
LULU — Meghan Frank, Interim Co-CEO and CFO (FY2026-Q2) — read it in the call
Copart agreed to acquire ACV, absorbing an asset-light marketplace selling 800,000 dealer vehicles annually with virtually no physical land footprint. The transaction expands the salvage yard leader directly into mainstream dealer-to-dealer wholesale auctions.
Vehicle remarketing is seeing a notable strategic expansion as physical salvage infrastructure combines with an asset-light digital marketplace. By purchasing a platform that transacts over eight hundred thousand units per year without requiring owned physical acreage, a major yard operator can dramatically expand its reach across mainstream automotive transactions. This approach allows the buyer to capture digital dealer wholesale volume without the capital-intensive real estate requirements historically tied to vehicle storage. Future value creation hinges on how effectively the digital platform integrates into broader auction networks without increasing land footprints.
We have agreed to acquire ACV. 1 of the largest primarily digital automotive marketplaces in the country. ACV sells more than 800 thousand vehicles, each year, and importantly, operates with virtually no land of its own.
CPRT — A. Jayson Adair, CEO and executive chairman (FY2026-Q4) — read it in the call
Consumer Staples
Brown-Forman noted that 19 of 20 Nielsen spirits categories are contracting, with U.S. whiskey and tequila suffering the steepest declines and only ready-to-drinks growing. It signals a broad-based structural hangover across mainstream spirits rather than isolated brand weakness.
Widespread softness across retail channels has pulled virtually the entire beverage alcohol industry into negative territory, sparing only ready-to-drink options from broad-based volume declines. Even historically resilient categories are losing ground, with tequila underperforming and falling behind domestic whiskey in retail tracking metrics. This broad retreat underscores that current headwinds stem from overarching category-wide contractions rather than company-specific execution issues or minor market share shifts. The magnitude of this industry-wide downturn will depend on whether ready-to-drink formats can maintain sufficient momentum to offset persistent weakness across traditional spirits categories.
If you look at Nielsen, and you do the category breakdown, of which they, I do not know, have 20 categories in there. First of all, every single one of them is declining. The only thing that is growing is RTDs. Literally, there is not one growing category. But the single strongest category is U.S. whiskey. Tequila has now fallen several points behind U.S. whiskey. It is down 0.5 point
BF-B — Lawson Whiting, President and Chief Executive Officer (FY2027-Q1) — read it in the call
Coming up
2026-09-24 · COSTCO WHOLESALE CORP /NEW (COST) — Watch for membership fee revenue growth and renewal rates following recent fee adjustments, alongside non-food e-commerce and discretionary demand.
2026-09-23 · CINTAS CORP (CTAS) — Watch for organic revenue growth across Uniform Rental and First Aid segments alongside operating margin resilience amid broader employment trends. — our analysis
2026-09-17 · FEDEX CORP (FDX) — Watch for structural cost savings delivered under the DRIVE initiative and parcel volume trends across Express and Ground amid global demand shifts. — our analysis
2026-09-22 · AUTOZONE INC (AZO) — Watch for domestic same-store sales trajectory, commercial (DIFM) segment share gains, and gross margin durability against supplier cost pressures. — our analysis
2026-09-23 · PAYCHEX INC (PAYX) — Watch for SMB client headcount and hiring trends, Management Solutions revenue growth, and the impact of rate expectations on float income. — our analysis
2026-09-24 · DARDEN RESTAURANTS INC (DRI) — Watch for same-restaurant sales and traffic trends across Olive Garden and LongHorn Steakhouse, plus the impact of promotional pricing on restaurant margins. — our analysis
2026-09-16 · LENNAR CORP /NEW/ (LEN) — Watch for new order volume growth, home sales gross margins, and the extent of mortgage rate buydowns and incentives needed to sustain absorption. — our analysis
2026-09-23 · GENERAL MILLS INC (GIS) — Watch for organic pound volume recovery versus price realization in North America Retail and Pet, alongside promotional intensity and gross margin performance. — our analysis
Companies that reported this period
17 earnings calls held between 2026-08-29 and 2026-09-12.
2026-09-01 · Credo Technology Group Holding Ltd (CRDO) — FY2027-Q1
2026-09-01 · Dell Technologies Inc. (DELL) — FY2027-Q2
2026-09-01 · Medtronic plc (MDT) — FY2027-Q1
2026-09-01 · Palo Alto Networks Inc (PANW) — FY2026-Q4
2026-09-02 · Broadcom Inc. (AVGO) — FY2026-Q3
2026-09-02 · BROWN FORMAN CORP (BF-B) — FY2027-Q1
2026-09-02 · Hewlett Packard Enterprise Co (HPE) — FY2026-Q3
2026-09-02 · NetApp, Inc. (NTAP) — FY2027-Q1
2026-09-02 · Snowflake Inc. (SNOW) — FY2027-Q2
2026-09-03 · CIENA CORP (CIEN) — FY2026-Q3
2026-09-03 · lululemon athletica inc. (LULU) — FY2026-Q2
2026-09-09 · CASEYS GENERAL STORES INC (CASY) — FY2027-Q1
2026-09-09 · COOPER COMPANIES, INC. (COO) — FY2026-Q3
2026-09-10 · ADOBE INC. (ADBE) — FY2026-Q3
2026-09-10 · COPART INC (CPRT) — FY2026-Q4
2026-09-10 · ORACLE CORP (ORCL) — FY2027-Q1
2026-09-11 · KROGER CO (KR) — FY2026-Q2