Green’s Dictionary of Slang

(US) an expression of excitement, enthusiasm.

1949		H. Miller Sexus (1969) 247: I wanted to yell something that would shock them out of this awesome trance. (Shit! Hot shit!...).
1986		S. King It (1987) 299: ‘Hot shit!’ Eddie screamed, excited.
1989		H. Rawson Dict. of Invective (1991) 352: hot shit. Hot shot, hot stuff; often ironic, comparable to hot dog. Also an exclamation of amazement and appreciation.