11AM Hour: HPE CEO on Earnings, Generac CEO on Power Deal & IHG CEO on Travel Demand 6/2/26

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Carl Quintanilla (1:05)

Good Tuesday morning, welcome to Squawk on the Street. I'm Carl Quintanilla with Cimo Modi here at Post 9 of the New York Stock Exchange. Sara is on assignment today. This morning, shares of HPE are surging on pace for their best day ever, after the company posted its biggest earnings beat since 2018 We're gonna break down the quarter in the outlook with CEO Antonio Neri.

David Faber (1:24)

Plus, Generac, joining the data center circus, shares rallying as the company reaches a backup power deal with an AI hyperscaler. We're joined by the CEO, Aaron Jettfield, and we'll also get a read on the state of the consumer and the travel industry with the CEO of IHG Hotels and Resorts.

Carl Quintanilla (1:40)

As for markets, a little bit of session highs here, back above 7600 on the S&P. Dow is up 71, is also a race in losses. Sector wise, things that are working, utilities up 1%, industrials and materials also up 1%. VIX is still around 16

Yields have come back a bit, even though we got a pretty good Joltz number for April. Let's begin with the markets. Our Senior Markets Commentator, Mike Santoli, joins us on sort of the burden of proof as to whether this market deserves some of the valuations it's getting.

Mike Santoli (2:11)

And sort of how extreme are the extremes that we're observing in terms of the AI theme, what it means for index level valuations and all the comparisons to the tech bubble in 99 of 2000 So I think on one level, the burden of proof is on those people who insist we are in a rerun of the bubble peak in 2000, because we have to keep in mind what that actually meant. That meant the S&P went on to be cut in half in two and a half years. The NASDAQ went down 75 percent. It was a lost decade for stocks. The indexes were flattened down over the next decade in real terms, much worse. You saw devastation in equity land. And I don't think that most people say, hey, it's just like 1999, 2000, actually believe that.

It cuts the other way, too, though, because if you say it's only 1998, we're still on the way up. Well, you still had a five-year negative forward return in 1998 So all that stuff is in the mix. And I do think right now you can point to some of the synchronicity in terms of elevated valuation. Semi's just had their best two-month run since the top in 2000

You look at things like the concentration of the market and equity supply. All those things, atmospherically seem familiar to me. And then you see the urgency, the grabbiness of this market when it comes to looking for tangential ways to play the same dominant theme. Whether it's HPE, you guys are going to talk about going up as much in a step function that we're seeing right there. So all of that stuff, it sort of feels similar, but I don't think it's necessarily to the point where you can say with confidence that we're at some kind of major trend change.

Carl Quintanilla (3:44)

Is it clear to you what's being sold in preparation to buy things that are coming online?

Mike Santoli (3:48)

It's not quite clear to me that there is a dollar for dollar. Let's just set aside the cash so we have something to buy down the road. I think you can see it in the total neglect in defensive parts of this market. They're getting blasted out. Nobody cares that they're cheap. Nobody cares that there's dividend scarcity at the index level and they have dividends. So I guess arguably the direction of travel is away from anything defensive and old economy and toward tech.