Dell Rides Trump's Endorsement Wave, But Options Traders Are Quietly Hedging the Afterparty 🖥️

Shares of Dell Technologies (DELL) climbed as much as 10% to an intraday high near $429.35 on Monday after President Donald Trump urged Americans to buy Dell for the third time in five months, adding more than $15.8 billion in market value. "Go out and buy a Dell. We'll get them that money back one way or another. I also want to thank Micron," Trump said during the opening bell on Wall Street to launch Trump Accounts, a new government-linked savings program. The rally came after founder Michael Dell pledged $6.25 billion to the initiative.

The endorsement followed a pattern tracked by traders since February, when Trump first told a Georgia crowd to buy Dell and the stock climbed to a record after a repeat call at a May White House event. Dell has more than tripled since February, according to government ethics filings reviewed by media outlets, which show Trump's account purchased between $1 million and $5.1 million of Dell shares on February 10, nine days before his first public plug, a disclosure that ethics experts have flagged as a conflict of interest.

Underlying the political tailwind is a sharp acceleration in Dell's AI server business. AI server revenue reached $16.1 billion in the most recent quarter, up 757% year-over-year, according to a company filing. Management has since raised its full-year AI server target to about $60 billion, and order backlog now tops $50 billion. The Pentagon also awarded Dell a $9.7 billion, five-year IT contract around the same period.

Beneath the rally, however, options market positioning and margin trends tell a more cautious story. Dell's put-call ratio, which counts open bets on direction, sat at 1.11 on July 2 and 1.12 on July 6, even after Monday's surge, indicating more open bets on a decline than a rise. Daily call volume briefly slipped to 0.40 as some traders chased the move, while the broader Chaikin Money Flow reading stood slightly positive near +0.05 over 20 days, compared with negative readings for rivals Supermicro (SMCI), Broadcom (AVGO), and HP (HPQ). In Dell's infrastructure segment, operating margin slipped to 10.5% as sales of costly Nvidia Blackwell chips repriced higher, down from 14.8% in the prior period, even as gross margin compressed from roughly 21% to under 18% over the past year.

Analysts remain split on whether fundamentals justify the valuation. Truist's Matthew Niknam kept a hold rating while lifting his price target to $360, noting Dell trades well above its long-run average near nine times earnings. The stock dropped almost 8% on July 2, and recent AI bubble warnings from investor Michael Burry have added to volatility heading into Dell's next earnings report.