An unwinding of pessimism could be fueling DELL's big breakout today
Dell Technologies Inc (NYSE:DELL) stock is brushing off the market mayhem today, last seen up 17% to trade at $142.32. The tech titan reported adjusted fourth-quarter earnings of $3.89 per share on $33.38 billion in revenue, both of which exceeded analyst estimates. Fiscal guidance for 2027 more than doubled, with AI server revenue amid data center demand the main driver.
Seven brokerages have issued price-target hikes in response, the best coming from Raymond James to $182 from $166. DELL is breaking out of consolidation today, heading for its highest close since Nov. 10, and now 31% higher year-over-year.
A short squeeze could keep the wind at the equity's back. Short interest rose by nearly 6% in the two most recent reporting periods, and the 27.45 million shares sold short account for a healthy 8.9% of the stock's total available float. At DELL's average pace of trading, it would take shorts almost four trading days to buy back their bearish bets.
Options traders have been betting bearishly. Dell's 10-day put/call volume ratio of 1.22 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits higher than 92% of other readings from the past year.
Echoing this is the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.16, which ranks in the 88th percentile of its annual range. An unwinding of these bearish bets could generate additional tailwinds.
Today, there's a shift toward calls. In just the first hour of trading, 53,000 calls have changed hands, 11 times the average intraday amount and nearly double the number of puts moving. The weekly 2/27 130-strike call is the most popular.