A double beat was enough for Medtronic, but not enough for Palo Alto after its massive run to new highs.
June 4, 2026
Yesterday, we heard from Medtronic $MDT, Ulta Beauty $ULTA, and Palo Alto Networks $PANW, and all three beat their headline expectations.
But the reactions were all over the place...
MDT rallied more than 5%, while ULTA and PANW each fell about 5%.
*Click the image to enlarge it
Medtronic was the clear winner of the session.
The $100 billion medical device giant reported a double beat and rallied 5.7%, marking its best earnings reaction since 2018.
And that matters because this stock has been one of the weaker large-cap healthcare names in the S&P 500, grinding lower for most of the year while the broader market kept pushing to new highs.
Medtronic remains below a lot of overhead supply, and one strong reaction does not magically turn a downtrend into a primary uptrend.
But this is often how repair begins...
Earnings sentiment improves first, price stops going down, and only then does the larger base-building process become obvious on the chart.
The fundamental backdrop gives the bulls something to work with.
Medtronic delivered 9.9% YoY revenue growth and posted its strongest annual top-line performance in 10 years.
The cardiovascular segment grew 10.1% YoY, and the company continues to build momentum in its other business segments.
And while that doesn't make Medtronic a leader yet, it makes the stock a repair candidate worth watching.
If buyers can build on this reaction, Tuesday could mark the first real sign that the worst of the selling pressure is behind it.
Palo Alto Networks was the opposite setup.
Heading into the report, PANW looked fantastic. The stock had doubled from its early-year lows, ripped to new all-time highs, and led the cybersecurity industry higher.
The issue was never the chart...
The issue was the earnings scorecard.
As we wrote in Sunday’s Weekly Beat, PANW had already been punished for back-to-back earnings reports despite healthy revenue growth, strong Next-Generation Security ARR growth, and continued progress with its platformization strategy.
This report was its chance to flip earnings sentiment from a headwind to a tailwind.
And it failed that test...
Palo Alto Networks reported another double beat, but the stock still fell 5.6%. That marks the third consecutive negative earnings reaction, suggesting the market is demanding more from this company after such a massive run.
In the report, revenue grew 31% YoY, Next-Generation Security ARR grew 60%, and remaining performance obligation grew 36% to $18.4 billion.
What's more, the management team continues to argue that AI is making cybersecurity more urgent as attack timelines compress and enterprises move AI from experimentation into production.
But the market already knew that...
After doubling in a few months, PANW needed a report strong enough to reset expectations higher, and Tuesday’s reaction says it didn't clear that bar.
And while that doesn't mean the stock is broken, it does warrant caution.
Pullbacks are allowed in primary uptrends, especially after explosive moves. But three straight negative earnings reactions are not something we can ignore, even when the chart still looks strong.
We'll be keeping a close eye on PANW's price action over the coming days to see whether sellers follow through to the downside.
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Stay safe out there,
-The Beat Team
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