DALE'S "DUAL REVEALING": THE POLITICAL NARRATIVE OF AN OLD SERVER

Original author: Cake, Deep tide TechFlow

If by the end of 2022 you'd say to an American equity fund manager, "I'm going to retake Dale," he'd probably be polite enough to end this conversation。

AT THAT TIME, DALE'S STOCK PRICE STRUGGLED AT $30, THE WHOLE COMPANY WAS PLACED IN THE MARKET'S “MATURITY TO DIE”, THE PC BUSINESS WAS CAUGHT BY APPLES AND HOOKS, THE TRADITIONAL SERVERS WERE PULLED OUT OF DEMAND BY CLOUD COMPUTING, AND THE OLD DIRECT-SELLER MODEL SOUNDED LIKE A JOKE IN THE NEW WORLD OF INVEIDA AND THE DEFINITION OF THE TELECOMMUNICATIONS STOCK. THE RATIO IS ONLY IN SINGLE DIGITS, THE ANALYSER ' S TARGET PRICE IS LOWER THAN THE CURRENT STOCK PRICE, AND THE AGENCY IS SLOWING DOWN。

Three and a half years later, on May 28, 2026, Dell rose almost 40 per cent in one time, $317 at the opening point the next day, and the market value went to $220 billion。

From the low point in 2022, the increase was more than 10 times greater. Michael Dell's own net wealth was up to $165 billion, the world's seventh largest。

THIS IS THE COUNTERATTACK IN WHICH THE UNITED STATES SHARES HAVE BEEN THE LEAST VISIBLE AND MOST VULNERABLE TO MISINTERPRETATION IN THE PAST THREE YEARS. PUT THE COMPANY UNDER THE MICROSCOPE, HOW DID THE AI WAVE AND TRUMP HOLD THE TWO LINES ON DALE? WHICH ONE OF WALL STREET'S STORIES AND WHICH ONE OF THE WHITE HOUSES

The Dale on Wall Street

Let's start with the books。

AFTER 28 MAY, DALE ANNOUNCED THE PERFORMANCE OF THE FIRST QUARTER OF THE FINANCIAL YEAR 2027: A 88 PER CENT INCREASE IN REVENUE TO $43.8 BILLION AND AN EPS INCREASE OF 214 PER CENT. BUT THE REAL DETONATING STOCK PRICE WAS A YEAR-ROUND GUIDE, AND MANAGEMENT PUSHED THE ORIGINAL $14 BILLION RECOVERY PROJECTION TO $16.7 BILLION, OF WHICH THE AI SERVER CONTRIBUTED $60 BILLION。

The Wall Street consensus is expected to be nearly $2.5 billion higher. In large holdings, this level of guidance is almost unheard of。

The logical chain behind the numbers is clear: COO Jeff Clarke revealed at a teleconference that the AI server order of $24.4 billion for the current season had been shipped $16.1 billion and that the backlog had reached a record high. The client list includes courtesy, Honiwell, Samsung, and the AI Factory product line has added about 1,000 business clients, bringing the total to 5,000。

This is a story of shovel sales, but the beauty of the story is that the gold miners changed。

Over the past two years, the demand for AI servers has been monopolized by four cloud manufacturers: Microsoft, Google, Meta, Amazon. It's a highly concentrated and bargaining power market, where Dale is more like a high-level porter, putting GPUs from Inverda into a cabinet and making some hard money。

THE DEMAND CURVE BEGAN TO GROW LATER IN 2025. BUSINESS CLIENTS BEGAN TO BUY “PRIVATE AI” ON A LARGE SCALE: THEY DID NOT WANT TO SHOVE THEIR CLIENT DATA, PATENT MODELS, COMPLIANCE RECORDS INTO A CABINET IN AWS. RYO HAD TO TRAIN IN DRUG DISCOVERY MODELS IN HIS OWN DATA CENTRE, AND HONIWEL HAD TO RUN THE FORECAST MAINTENANCE OF PRODUCTION LINES ON HIS OWN SERVER。

The demand for "on-prem AI" coincides with Dale's best practice in the last 40 years: selling servers, storage, networks, and services to the enterprise IT sector. The cloud factory doesn't do this business at all, Super Micro can't deliver and service, HPE can't do it on a scale. Dale is almost a default option in this market。

MANAGEMENT QUOTED A SET OF NUMBERS AT A TELEPHONE CONFERENCE: IN THE NEXT 24 MONTHS, ABOUT 85% OF BUSINESSES WILL PUT THE GENERATED AI WORKLOAD LOCALLY. THIS IS A MARKET THAT IS LONGER, MORE DISPERSED AND MORE HEALTHY IN TERMS OF PROFIT STRUCTURE THAN THE CAPITAL EXPENDITURE OF SUPER-LARGE CLOUD MANUFACTURERS。

Wall Street bought this curve。

The curse of the Maori rate

There's a flaw in this story: Dale's Maori rate is falling。

THE MĀORI RATE FOR FY 2024 IS 24.3%, TO 20.1% FOR FY 2026, AND FY 2027 Q1 CONTINUES TO GO DOWN。

REASONS ARE NOT COMPLICATED: THE MOST VALUABLE OF THE AI SERVERS ARE THE BRITISH GPU, SINGLE 8 CARD H200 SERVER, AND GPU COSTS MORE THAN 60% OF THE WHOLE BOM. DALE IS ESSENTIALLY AN INTEGRATED VENDOR, AND THE BULK OF THE GPU'S MONEY IS BILLED, SOLD TO CLIENTS IN THE LEFT HAND, AND HAS A RATHER LIMITED MARGIN. THE MORE IA SERVERS ARE SOLD, THE FASTER THE BATTALION RETURNS, THE MORE THE MĀORI RATE IS DILUTED。

This is typical of the “harvest paradox”. In theory, the market should give a discount, rather than a premium, to a company that trades off its Maori ratio with an explosive increase in income。

But the market gave it a premium。

THE FIRST REASON IS MATHEMATICS: THE MĀORI RATE, THOUGH DECLINING, IS SOARING. FY2026 DALE'S AI SERVER DELIVERED MORE THAN $25 BILLION IN 2026, AND THE FY2027 DIRECTED $60 BILLION, EVEN THOUGH THE MĀORI RATE IS ONLY HALF OF THE TRADITIONAL BUSINESS, THE ABSOLUTE MĀORI CONTRIBUTION HAS FAR EXCEEDED THE SUM OF PC AND TRADITIONAL SERVERS. MARKETS ARE SMART ENOUGH TO START LOOKING AT “MĀORI DOLLARS” RATHER THAN “MĀORI PERCENTAGES”。

The second reason is more subtle: the market is pricing additional sales. For each of the AI servers sold, Dale bound to sell his/her home storage (PowerStore, PowerScale), network equipment, five-year transportation service contracts. These back-end operations have a ratio of two to three times that of the AI server. AI servers are hooks, and what really makes money is hooks towed fish。

The re-pricing of Dale's stock prices over the past year was essentially a re-understanding of the market's business model: from a “low Maori hardware porter” to a “high Maori service platform with low Maori hardware as bait”。

THIS IS THE DALE ON WALL STREET, AN OLD I.T. GIANT WHOSE BUSINESS MODEL WAS UNEXPECTEDLY RENOVATED BY THE AI DEMAND CURVE。

Dale from the White House

The other half。

December 10, 2025, Roosevelt Hall, White House. Michael Dell and his wife Susan Dell stood by Trump and announced a donation of $6.25 billion to the Trump Accounts project。

This is a statutory project written in One Big Beautiful Bill Act to open a tax-free investment account for every American child born between 2025 and 2028. The Dell family will provide an initial investment of $250 per person to 25 million American children. This is one of the largest private donations ever made to an active president's signature project, double the sum of all public charity donations from the Dell family since 1999。

Michael Dell himself said the other day, which was interesting: "41 years ago, when I founded this company, we invented a straight-selling model. This time, we're doing direct charity."

Five months later, on May 8th, 2026, the day before Mother's Day, Trump, at a public event in the White House, shouted in front of Michael Dell: “Go out and buy a Dell” and Dale jumped 14 percent on that day。

TWO WEEKS LATER, ON MAY 27, 2026, THE PENTAGON ANNOUNCED THE AWARD OF A $9.7 BILLION CONTRACT TO THE DALE FEDERAL SYSTEM FOR A FIVE-YEAR PERIOD TO CONSOLIDATE MICROSOFT SOFTWARE LICENCES COVERING THE ENTIRE UNITED STATES MILITARY, THE INTELLIGENCE SYSTEM AND THE COAST GUARD. THIS IS ONE OF THE LARGEST IT CONTRACTS IN RECENT YEARS. THE NEXT DAY, DALE'S FINANCIAL OFFER WENT UP 40%。

this timeline was repeated almost in the same detail by bloomberg: $6.25 billion in december, white house stations in may, and $9.7 billion in defence contracts at the end of may. there is one more detail that cannot be missed:  Trump himself quietly bought up to $5 million worth of Dale stock in 2025。

Michael Dell owns about 42 per cent of Dale's shares. From the day Trump endorsed Dale for the White House, his book fortune increased by tens of billions of dollars. The $6.25 billion donated, at this rate of return, is an “investment” with a return of more than 10 times。

There is no ethical controversy here. It's worth another observation: it's not an isolated event. On 30 April 2026, Trump issued an invitation to Intel, 3 per cent after the Intel drive, and the United States Government held 9.9 per cent of Intel equity. Palantir has a similar “presidential stand-in” movement. A new market pattern is emerging: in the US stock in 2026, the president's social media account, the White House schedule, and even his personal holdup is becoming a brand-new “policy Alpha”。

Two Dales, one valuation

It's interesting to see these two storylines。

THE ONLY THING YOU CAN BELIEVE IS THAT THE FIRST DALE, WALL STREET, IS AN OLD FACTORY THAT WAS SAVED BY AN AI DEMAND CURVE UNEXPECTEDLY, AND THE CENTRAL QUESTION OF VALUATION IS “HOW LONG, HOW LONG THE AI SERVER MARKET CAN RUN, AND WHETHER THE MAORI RATIO CAN BE STABLE”, WHICH IS A STANDARD GROWTH STOCK VALUATION。

Only the second Dale, the White House man, you see a company that's a big bet in political-business relations and has won a bet, and the central issue in the valuation is that “this relationship can also sustain several presidential terms, parliamentary cycles”, which is a political risk pricing issue。

The market, however, folded the valuations of two Dales into a single statement。

GuruFocus gives an estimate of the intrinsic value of US$ 153 and the current share price of US$ 317, with Dale overestimated by 106 per cent. The average target price for the group of analysts is $218, which is well below current prices. Even the most optimistic seller analyst could not keep up with the stock price。

What does this valuation gap mean? It means that the market is paying for something that is not in the model。

IT'S NOT AI, BECAUSE AI HAS WRITTEN ALL THE MODELS, IT'S A POLITICAL NARRATIVE, IT'S THE MARKET'S PRE-PRICING OF "DELL WILL KEEP GETTING FEDERAL CONTRACTS, WILL BE CONSISTENTLY ENDORSED BY THE PRESIDENT, WILL BE THE TOP SUPPLIER OF THE TOP 2.0 AI NATIONAL TEAM."。

A new picture of America

Dale's story is here, so you can look a little further。

The logic of Silicon Valley over the last 30 years in the US stock narrative is that "technical power versus political power": Apple does not accept the request of the FBI to unlock iPhone, Google employee protests the company for an AI project for the Pentagon, and Zuckerberg has been summoned repeatedly by Congress but has not stood up. It's a natural defensive gesture of an engineer culture to Washington。

The US share in 2026 is telling us another story: another company is emerging, they embrace politics, they see the White House as their most important client, and they see the President's approval rate as their Beta coefficient. Dale is the cleanest sample of this curve, Intel, Palantir is the other two。

THIS CURVE MEANS THAT THE TRADITIONAL FINANCIAL ANALYSIS FRAMEWORK BEGINS TO FAIL, AND WHEN AN AMERICAN COMPANY CAN BE PRICED AT THE SAME TIME BY BOTH "AI DEMAND" AND "PRESIDENTIC PRAISES", YOU NEED TO LOOK NOT ONLY AT ITS BALANCE SHEET, BUT ALSO AT ITS CEO'S POLITICAL CALENDAR。

Dale's most valuable asset, probably neither its server factory nor its customer list, is the line between Michael Dell himself and the White House。

The next question is: How long will this line last

Trump's second term is almost three years. If the Republican Party loses in the mid-term election, if an investigation points to a political scandal directed at “philanthropy for contract”, and if Michael Dell himself turns his back on the White House for any reason, the line will be broken. At that time, the portion of Dale's stock price that was priced by political narratives would be removed by the market at the same speed。

So whether you have Dale or want to buy Dale, you need to ask yourself two questions: which one did you buy Dale? Another Dale, when are you going to sell it

*Contribution of interest: Dell stock held by the author