DELL Stock Is Down 12% From All-Time High With Bearish Retail Sentiment — But Government Contracts Keep Growing

• Dell Federal Systems L.P. has secured a $1.4 billion contract from the U.S. Air Force.
• Last month, Dell reported first-quarter sales and profit sharply higher than expectations and raised its full-year outlook.
• Stocktwits sentiment for DELL remained ‘bearish.’

Dell Technologies’ government business continues to soar, even as its stock slides and retail sentiment dips.

Dell’s unit, Dell Federal Systems L.P., has secured a $1.4 billion contract from the U.S. Air Force to provide Microsoft enterprise software licenses and services, the U.S. Department of War announced Monday.

The contract, which runs through April 2029, provides for Microsoft 365 E3/E5 and F-series enterprise software licenses, software assurance, and associated subscription services, the department’s statement said.

The deal comes close on the heels of the Pentagon awarding a five-year, $9.7 billion contract to Dell Federal Systems to consolidate Microsoft and ‌other enterprise software licenses scattered across the military services, the intelligence community, and ​the U.S. Coast Guard into ​a single contract vehicle.

The consolidation of contracts ensures service members and civilian department employees continue to have access to the same services, but those services will now cost less and save taxpayer dollars, the War Department said in a May 28 statement.

Dell’s Stellar First-Quarter

Dell surprised investors last month when it reported first-quarter sales and profit sharply higher than expectations and raised its full-year outlook. Shares rallied 33% the next day. 

Revenue jumped 88% to $43.84 billion, compared to analysts' forecast of $35.74 billion. Sales were boosted by revenue from the infrastructure solutions group, which nearly tripled to $29 billion.

Adjusted profit of $4.86 per share also came in higher than the $2.96 target. Dell raised its fiscal 2027 revenue guidance to a $165 billion to $169 billion range, up from the $138 billion to $142 billion range, and adjusted earnings per share guidance to $17.90 at the midpoint, up from $12.90.

Dell’s strong performance was driven by surging demand for traditional servers as enterprises refreshed their computing infrastructure and expanded capacity to handle larger workloads.

Retail View On Dell

On Stocktwits, the retail sentiment for DELL remained ‘bearish’ and unchanged over the past week, as investors grew cautious after a sharp run-up in the stock. DELL shares have climbed nearly 270% over the past 12 months, though they have since weakened after hitting an all-time high on June 2.

“$DELL Sold and will not look back at this,” said a trader. Another wrote: “$DELL trading at a higher PE than google, amazon, nvidia, meta, netflix, etc...i'm sure that'll last.”

Traders remain cognizant that Dell is among the stocks pumped by President Donald Trump, and see spikes whenever he mentions it. Last month, at a Mother's Day event at the White House, Trump thanked the Dell family and said, "Go out and buy a Dell! They're great." 

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