President Donald Trump has now urged Americans to buy Dell three times in five months, with his latest call on July 6 at a White House ceremony helping lift Dell stock by more than 220% this year. According to reports from The Kobeissi Letter, Trump made his latest comments while praising Dell CEO Michael Dell for investing in the Trump Accounts initiative, a new program that gives eligible American children a tax-advantaged investment account with a $1,000 seed deposit from the U.S. Treasury. The timing raises conflict-of-interest concerns as government ethics filings show Trump owns between $1 million and $5.1 million in Dell shares, purchased about nine days before his first endorsement in February. Despite the president's continued support, traders are quietly betting against the stock through bearish options, with the put-call ratio staying above 1 even during the price surge.
Dell's most recent quarterly results, reported May 28, came in well above expectations with EPS of $4.86 against a consensus estimate of $2.96, and revenue of $43.84 billion versus an estimate of $35.74 billion - representing a year-over-year revenue gain of 87.5%. As reported by The Kobeissi Letter, the company's AI server backlog stood at $51.3 billion, while Dell set FY2027 EPS guidance at $17.90 and Q2 2027 EPS guidance at $4.80. The stock's 52-week range runs from $110.22 to $469.47, with the 50-day moving average at $332.26 and 200-day at $208.59.
The stock surge is supported by strong artificial intelligence demand, with Dell's AI server revenue reaching $16.1 billion in its most recent quarter, representing a 757% increase from the previous year. As reported by Reuters, management has raised its full-year AI server target to approximately $60 billion, while the company's order backlog tops $50 billion. Additionally, the Pentagon awarded Dell a $9.7 billion, five-year IT contract, further boosting investor confidence in the company's AI-focused business growth. However, the company's infrastructure arm operating margin fell to 10.5% as AI-server sales jumped 757%, with the margin pressure coming from the high cost of Nvidia chips and scarce memory components.
Despite the 220% rally, options market data reveals bearish sentiment with the put-call ratio staying above 1 even after Trump's latest endorsement. According to The Kobeissi Letter, the open-interest reading was 1.11 on July 2 and 1.12 on July 6, even after Trump's Monday boost. While daily volume did slip to 0.40, a sign some traders bought calls to chase the move, the bigger pool of open bets remained negative. The Chaikin Money Flow (CMF) reads slightly positive near +0.05 over 20 days, indicating some institutional money is still flowing in, though it's negative for rivals like Supermicro, Broadcom, and HP. The pressure intensifies as memory and storage costs rose about 10% over the past 20 days while Dell's stock gained only 4%, making the profit math increasingly challenging.
Dell builds the AI server but doesn't own the most valuable component - Nvidia (NVDA) owns the chips that power these machines. As reported by The Kobeissi Letter, Dell buys Nvidia's chips and sells the finished computer, passing most of the chip's cost to the buyer. This dependency creates thin profit margins, with Dell's infrastructure arm operating margin falling to 8.8% during the ramp of Nvidia's costly Blackwell chips, though it recovered to 14.8% with higher-margin storage sales. The stock has outrun Nvidia this year, up about 132% over three months while Nvidia is up about 10%, yet Dell usually moves the day after Nvidia, not before, indicating it's riding Nvidia's demand rather than creating its own. This makes Nvidia the early warning system for potential AI demand cracks, as Dell cannot get ahead of trouble at its supplier.
