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Dell Stock Up 138% on AI and Trump Push, But Pullback Risk Builds

Dell’s stock price is currently $317.05, soaring after a significant 138% increase. This rally was sparked by Donald Trump’s endorsement on May 8th and strong financial results for the first quarter of its fiscal year 2027.

Despite the recent upward trend, indicators both within the market and in options trading suggest a potential slowdown before prices continue to rise.

Dell Q1 FY27 Earnings Crush Every Estimate

Dell Technologies announced its first quarter financial results, reporting $43.8 billion in revenue, significantly exceeding expectations of $34.81 billion. The company’s adjusted earnings per share (EPS) were $4.86, also surpassing the predicted $2.88. EPS is a measure of profit per share of stock. This represents a substantial 214% increase compared to the same quarter last year.

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AI servers were a major driver of growth this quarter. Revenue from servers optimized for AI reached $16.1 billion, a significant increase of 757% compared to last year. Dell also received $24.4 billion in AI-related orders during the same period.

Dell’s first quarter 2027 earnings show strong performance: revenue reached $43.8 billion, significantly exceeding the expected $34.81 billion, and increased by 88% compared to last year. Adjusted earnings per share were $4.86, up 214% year-over-year, also surpassing the estimated $2.88. Revenue from AI-optimized servers soared by 757%, reaching $16.1 billion.

Looking ahead to the full year, Dell anticipates revenue between $165.0 and $169.0 billion, well above the expected $143.9 billion, representing a 47% year-over-year increase. Adjusted earnings per share are projected to be $17.90, compared to an expected $13.16.

— Wall St Engine (@wallstengine) May 28, 2026

Company leaders now predict $60 billion in AI server revenue for fiscal year 2027, an increase from their previous forecast of $50 billion. They also anticipate total revenue for the year to be between $165 and $169 billion, significantly higher than what analysts had predicted at $143.9 billion.

Because the earnings report was so much better than expected, traders immediately started watching for increased options trading and large institutional investments. A surprise of this magnitude can sometimes cause a stock price to jump too quickly, and the subsequent trading patterns seemed to suggest that’s what happened here.

Trump Endorsement and Pentagon Contract Drive the 138% Rally

Dell’s recent strong earnings report follows a surprising boost from an unexpected source. Back on May 8, 2026, former President Trump publicly encouraged investors to buy Dell stock, and the company’s share price had already begun to rise at the time.

Since taking office, the stock market has performed well under President Trump. Recently, on May 8th, he publicly encouraged people to buy stock in Dell. Just nineteen days later, on May 27th, Dell received a significant $9.7 billion contract from the Pentagon. Today, Dell announced earnings that exceeded expectations.

— The Kobeissi Letter (@KobeissiLetter) May 28, 2026

Just under three weeks after that, on May 27th, Dell received a $9.7 billion contract from the US Department of Defense. This deal solidified the initial political support Dell had been gaining, turning it into a firm foundation for future success.

Dell’s stock price soared 138% from its low point in early March, showing a strong upward trend. However, while this looks positive, some internal market indicators suggest the price may have increased too quickly and could be overextended.

CMF Double Top and Lower Volume Hint at a Pullback

Even while Dell’s stock price was reaching new peaks, indicators were starting to suggest underlying weakness. Chaikin Money Flow is a tool that tracks whether large investors are buying or selling a stock by analyzing both its price and trading volume.

The CMF indicator reached a high of 0.40 in early May but has since decreased to 0.24. This decline has created a double-top pattern in the indicator, despite the price continuing to rise.

The CMF is currently showing positive momentum, but it’s nearing a key upward trend line that’s been in place since mid-April. If the price falls below this trend line, it could signal that large investors are starting to sell.

Trading volume also shows a comparable pattern. While the earnings report on May 28th saw a high volume of 26.61 million shares traded, the overall volume of this recent increase is lower than what we saw during the surge in early March.

When a stock price goes up but fewer shares are being traded, it often means the price will soon fall. The doji candlestick pattern that appeared at the end of Thursday’s trading session supports this idea. A doji happens when the price doesn’t really change much during the day, showing that buyers and sellers are uncertain after a significant price movement.

When large investors are selling and a chart pattern is unclear, checking options trading activity can help confirm the trend.

Put-Call Volume Ratio Doubles Around Q1 Earnings

As a crypto investor, I’ve been watching the options market closely, and I noticed a real change around the first quarter earnings reports. One thing I pay attention to is the put-call volume ratio – it basically shows how many put options are being bought compared to call options each day. If more call options are traded (the ratio drops below 1), it’s usually seen as a positive sign, suggesting people are generally bullish about the future price.

On May 20th, trading activity in Dell showed a strong bullish signal, with a put-call volume ratio of 0.34. At the same time, the open interest ratio was 1.28, indicating that there were more put contracts open than call contracts.

Leading up to the earnings release on May 28th, trading activity significantly increased. The volume ratio reached 0.80, and open interest rose to 1.29. Notably, trading volume more than doubled over just eight days, coinciding with a rise in the stock price.

In my research, I’ve noticed a pattern: when there’s a lot of buying of put options on a day when companies report strong earnings, it often isn’t because investors think the stock will fall. Instead, it’s usually large shareholders protecting their existing investments – essentially buying insurance. This behavior makes sense when you look at the chart; it lines up with what we see in the Chaikin Money Flow indicator and overall trading volume.

After the earnings report, Wall Street analysts shared their opinions. Mizuho Securities maintained a BUY recommendation and increased its price target. Truist Financial kept its HOLD rating.

Positive developments are happening, but institutional investment is slowing down, and more people are protecting their investments against potential drops. Now, the price chart itself will tell us what happens next.

Dell Stock Price Prediction and Key Levels Post-Earnings

Dell’s stock now has a predictable path forward, based on its recent price action. It closed yesterday at $317, briefly reaching $326 during the day. The fact that the price couldn’t sustain above $326 confirms a key technical level from the previous price swing, strengthening the likelihood of the current pattern continuing.

A key support level for the stock is around $305, based on the 0.618 Fibonacci retracement. If the price drops further, the next support area is around $290. This potential drop could create a downward trend, but still fit within a bullish pattern suggesting a significant rally – potentially a 138% increase since the beginning of March.

If the price falls to $275, which is a key Fibonacci level, the current bullish pattern would likely remain valid. However, if it drops below $256, the pattern will start to lose strength. A definitive break below $227 would completely negate the pattern.

If the price bounces back from around $305 or $290, it suggests the upward trend will continue. Based on this pattern, a price of $431 is likely, which is a Fibonacci extension level. This target is close to Mizuho Securities’ revised price prediction of $435, an increase from their previous estimate of $350 on May 28th.

What happens next hinges on if buyers can hold the $305 price level. If they do, the price could rise to $431. But if $305 falls, we might see a further drop to $275 or even $256.

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2026-05-29 19:21