Why Gartner Stock Skyrocketed 31.2% Last Month
Key Points
Gartner reported Q2 earnings that came in far above the average Wall Street forecast.
The company's sales in the period also surpassed the average analyst target.
Gartner lowered its full-year sales target, but it increased guidance for earnings and free cash flow.
- 10 stocks we like better than Gartner ›
Gartner (NYSE: IT) shareholders enjoyed a month of huge gains in August. The stock moved 31.2% higher in the period, according to data from S&P Global Market Intelligence.
The broader market saw bullish momentum last month, with the S&P 500 up 2.6% and the Nasdaq Composite up 3.9%. But while the positive trading backdrop for the market at large helped support Gartner's gains, it was the company's better-than-expected second-quarter report that was the biggest catalyst.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Image source: Getty Images.
Gartner's Q2 report helped quiet fears surrounding the stock
Gartner released its Q2 report before the market opened on Aug. 4, and the company's results and forward guidance were significantly better than expected. The research and information services specialist posted non-GAAP (adjusted) earnings per share of $4.37, exceeding the average analyst estimate by $0.64 per share.
Revenue was still down 0.6% year over year at $1.68 billion, but it beat the average analyst target by roughly $50 million. Meanwhile, sales were actually up 2.8% using the company's adjusted comparison.
Investors have been concerned that the business would face a challenging sales environment amid the rise of artificial intelligence, and there has been some evidence that the trend is pressuring demand. With indications that revenue is either stabilizing or seeing modest growth, depending on the comparison methodology, the Q2 sales performance provided some counter-indicators that these concerns may be overblown.
Perhaps even more importantly, the big earnings beat in the quarter shows that the company was able to find areas for improved operational efficiency at a time when sales growth has been harder to come by. Net income increased 14.4% year over year to $275 million, and free cash flow was up 8.9% to $378 million.
Gartner's guidance also spurred bullish sentiment
With its Q2 report, Gartner raised its guidance for full-year earnings per share from $13.25 to $14. The company also hiked its FCF target to $1.19 billion -- up from $1.16 billion. While sales guidance was revised down to roughly $6.375 billion from roughly $6.405 billion due to currency headwinds, the stronger outlook on earnings was more than enough to offset the sales forecast shift in the eyes of investors.
Gartner stock also had substantial short interest heading into the publication of its Q2 results, and the better-than-expected print for the quarter and forward guidance may have produced short covering that helped create a huge rally for its share price. The company still has to prove that it can sustain its earnings momentum, but its recent business update was reassuring given some of the concerns surrounding its outlook.
Should you buy stock in Gartner right now?
Before you buy stock in Gartner, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Gartner wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $421,997!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,413,876!*
Now, it’s worth noting Stock Advisor’s total average return is 978% — a market-crushing outperformance compared to 213% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of September 8, 2026.
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool recommends Gartner. The Motley Fool has a disclosure policy.
