The quarterly earnings season continues this week. Ciena (CIEN) is approaching its 52-week high ahead of the report. In its last report, the firm posted revenue falling by nearly 20%.
Analysts at Morgan Stanley are bullish on Ciena’s prospects. The firm cited a derisked environment for FY 2024. For example, inventory is normalizing while market share in the cloud is tailwinds. Ciena is also ramping up WaveLogic 6.
In the discount retail sector, Dollar Tree’s (DLTR) plunge last week intensified. The firm will post the results on Wednesday.
Investors are worried that Dollar General’s (DG) problems will spread to Dollar Tree’s business. Neither Walmart (WMT) nor Costco (COST) have any trouble attracting customers. This suggests that Walmart is gaining market share. It will hurt the discount sector. Watch out for Ollie’s Bargain Outlet Stores (OLLI), Target (TGT), and Big Lots (BIG) underperforming in the quarters ahead.
In the technology sector, Hewlett Packard Enterprise is range-bound at between $16.50 and $20. When it posts quarterly results on Wednesday, HPE needs to demonstrate that AI server sales will lift its operating margins. Chances are rising that AI-related server sales will slow.
Customers who invested in building large language models will review their return on investment. A weak or negative return would send HPE stock lower.