Dell Wins $9.7 Billion Defense Mega-Contract, Stock Races to Historical High

Dell added more good news the night before its earnings release. The U.S. Department of Defense announced on Wednesday evening that it has awarded Dell a five-year software procurement contract worth approximately $9.69 billion, covering the centralized purchasing of Microsoft software licenses, cloud subscriptions, and software protection services for agencies such as the Department of Defense, the intelligence community, and the Coast Guard.

Boosted by this news, Dell's stock price rose by 4.6% to $319.40 on Thursday, potentially setting its 16th historical closing high for the year. Dell has cumulatively risen by 152% since the beginning of the year, continuously benefiting from the strong growth in demand for AI servers and networking equipment.

Evercore ISI analyst Amit Daryanani pointed out in a research report that the $9.7 billion five-year contract has substantial significance for Dell's annual revenue, and more importantly, "provides Dell with growth diversification beyond AI and enterprise business."

In terms of financial expectations, a survey of analysts by FactSet shows that Dell's adjusted earnings per share for the first quarter of the fiscal year 2027 are expected to be $2.96, with revenues expected to be $35.7 billion, a significant increase from the earnings per share of $1.55 and revenues of $23.4 billion in the same period last year. The market will also closely watch Dell's gross margin performance - the continued high prices and shortages of memory are putting pressure on the profitability of hardware manufacturers, and Dell has partially hedged this cost pressure through price increases.