How did ADI's Q2 2024 EPS surprise impact short-term traders?

Analog Devices' (ADI) Q2 2024 EPS surprise had a mixed impact on short-term traders, reflecting both positive and negative influences:

1. **Positive Impact**:
- **Earnings Beat Expectations**: ADI reported an EPS of $1.40 for Q2 2024, surpassing the analyst estimate of $1.26. This beat on expectations typically leads to a positive reaction from traders, as it indicates the company's performance is better than anticipated.
- **Revenue Beat Estimates**: The company's revenue for the quarter was $2.16 billion, exceeding the analyst estimate of $2.11 billion. This additional revenue, coupled with the EPS beat, suggests strong operational performance, which can boost investor confidence.
- **Stock Price Reaction**: Following the earnings release, ADI's stock traded higher, reflecting investor optimism about the company's resilience and future prospects. This indicates that the positive impact of the EPS surprise was recognized by the market.

|code|Ticker|Name|Date|EPS Surprise YoY|EPS Surprise|market_code|
|---|---|---|---|---|---|---|
|ADI|ADI.O|Analog Devices|20230930|-133.33333333333331|-0.03|185|
|ADI|ADI.O|Analog Devices|20231231|-93.33333333333333|0.01|185|
|ADI|ADI.O|Analog Devices|20240331|-86.66666666666667|0.02|185|
|ADI|ADI.O|Analog Devices|20240630|75.00000000000001|0.14|185|

2. **Negative Impact**:
- **Decline in Revenue**: Despite the revenue beat, the overall revenue declined by 34% year-on-year to $2.16 billion. This decline, coupled with a significant decrease in EPS to $0.61 compared to $1.92 in the same quarter last year, suggests underlying challenges that could dampen investor sentiment.
- **Softness in End-Markets**: The company faced softness in key end-markets such as communications, consumer, automotive, and industrial, which contributed to the revenue decline. This negative trend in key markets might have raised concerns among traders about the sustainability of the company's performance.
- **Market Reaction**: The stock experienced a decline of about 2.2% in the month following the earnings report, underperforming the S&P 500. This decline indicates that the market may have had concerns about the company's short-term prospects, despite the EPS surprise.

In conclusion, while the EPS surprise had a positive initial impact by beating expectations and leading to a temporary increase in stock price, the overall negative trend in key end-markets and the decline in revenue likely overshadowed these gains in the short term, resulting in underperformance relative to the broader market.