Dell is entering its earnings report in a strong position. On Thursday, shares rose 4.6% and were set to close at a record high after the Department of War announced a five-year, $9.69 billion contract with the company. This deal adds a significant government revenue stream to Dell’s already strong AI server business. Here’s what the contract includes and what investors are focusing on as earnings are released after the market closes Thursday.
The contract aims to make software purchases easier and more efficient for the Department of War, the Intelligence Community, and the Coast Guard. Customers will be able to buy Microsoft software licenses, cloud subscriptions, and software assurance through Dell. Evercore ISI said the deal is significant for Dell’s yearly revenue and sees it as a positive step, since it helps Dell grow beyond just AI and enterprise clients.
Dell’s stock is up 152% this year, thanks to strong demand for its AI servers and networking gear. Thursday’s gain marks the fifteenth time in 2026 that the stock has closed at a record high, with the first record set on March 25.
Analysts predict Dell will report adjusted earnings of $2.96 per share and revenue of $35.7 billion for the first quarter, a big jump from $1.55 per share and $23.4 billion a year ago. Wall Street is paying close attention to gross margins as Dell deals with higher memory costs caused by supply shortages. The company has increased prices to manage these challenges, and investors will be looking for earnings guidance that reflects the new government contract.
