Dell Federal Systems has been granted a $9.7 billion contract by the Pentagon, aimed at unifying Microsoft-related technology and licenses throughout the Department of Defense. This significant agreement pushed Dell shares up more than 4% in extended trading, reflecting strong investor confidence.
The Department of Defense selected Dell for a five-year blanket purchase agreement, known as the Core Enterprise Technology Agreement (CETA), to consolidate Microsoft software, services, and licenses. This initiative forms part of the latest Enterprise Software Agreement, intended to enhance efficiency across not only the entire department but also the broader Intelligence Community and the Coast Guard.
Kirsten Davies, DoD chief information officer, said to reporters at the Pentagon that by providing enterprise access to Microsoft 365 advanced cloud subscriptions and critical on premises licensing, this CETA acts as part of the digital connective tissue essential for Combined Joint All-Domain Command and Control, CJADC2.
Dell stocks surged 4.15% in an after-hour trading on Wednesday to $318 per share ahead of its upcoming earnings release set for May 28. As Dell prepares to present first-quarter fiscal 2027 results, market participants are anticipating continued business momentum, underpinned by what is perceived as a reasonable valuation.
Dell concluded fiscal 2026 on solid ground, reporting fourth-quarter revenue of $33.4 billion—a 39% increase from the prior year. Adjusted earnings per share reached $3.89, up 45% year-over-year, driven by robust demand for AI-related solutions and effective business execution.
The company’s artificial intelligence business contributed meaningfully, with $34.1 billion in AI orders recorded during the fourth quarter. Of these, $9.5 billion in AI servers were shipped, and Dell exited the quarter with a record $43 billion backlog in AI.
