President Donald Trump has urged Americans to buy Dell three times in five months, helping lift Dell (DELL) stock by more than 220% this year.

His latest plug came on Monday. Yet even with the president cheering it on, traders are quietly betting the stock will fall, and a closer look shows why.

Trump’s Third “Buy a Dell” Call in Five Months

Trump made his latest call at a White House ceremony on July 6, and the stock briefly jumped as much as 10%. He had already told people to buy Dell in February and May.

The timing looks awkward. According to government ethics filings, Trump owns between $1 million and $5.1 million in Dell shares, bought about nine days before his first endorsement in February.

There is a real business behind the hype. Dell now sells huge numbers of AI servers, the powerful computers that run artificial intelligence. That business grew 757% over the past year, and the stock soared 32% on its last earnings report.

Traders are Not Buying the Hype

Here is the part the headlines skip. In the options market, where investors place side bets on where a stock will go, the balance still leans bearish. A put-call ratio above 1 means more money is riding on a fall than a rise.

For Dell, that ratio stayed above 1 through the price surge. The open-interest reading, which counts all standing bets, was 1.11 on July 2 and 1.12 on July 6, even after Trump’s Monday boost.

The daily volume side did slip to 0.40, a sign some traders bought calls to chase the move, but the bigger pool of open bets stayed negative.

The flow of cash is mixed, too. A money-flow gauge called Chaikin Money Flow (CMF), a proxy for institutional flows, reads slightly positive for Dell, near +0.05 over 20 days, so a little money is still coming in.

The same gauge is negative for rivals such as Supermicro, Broadcom, and HP, indicating money leaving them.

So why the doubt when sales are booming? The answer sits inside the machines Dell sells.

Dell Builds the Box, but Nvidia Owns the Value

Dell builds the AI server, but not its most valuable part. Nvidia (NVDA) does. Dell buys Nvidia’s chips and sells the finished computer. This passes most of the chip’s cost to the buyer. So in its latest quarter, a roughly $16 billion AI-server haul was largely Nvidia’s revenue crossing Dell’s books, leaving Dell only a thin slice.

That thin slice shows in the profit. In Dell’s infrastructure arm (ISG), which houses its AI servers, operating margin fell to 8.8% during the ramp of Nvidia’s costly Blackwell chips.

Higher-margin storage sales lifted it back to 14.8%, but as AI-server sales jumped 757% and retook the mix, margin slipped to 10.5%. The faster Dell sells Nvidia-powered servers, the thinner its profit gets. That is the uncomfortable truth.

The pressure is growing. Over the past 20 days, Dell’s stock rose about 4%. Yet, the cost of the memory and storage parts it buys rose about 10%. When costs climb faster than the stock, the profit math gets harder.

There is one more tell. Dell has outrun Nvidia this year, up about 132% over three months, while Nvidia is up about 10%. Yet Dell usually moves the day after Nvidia, not before, so it is riding Nvidia’s demand, not creating its own.

That makes Nvidia the early warning. If Nvidia’s AI demand cracks, Dell tends to feel it the next day and cannot get ahead of trouble at its supplier.

So Trump can move Dell stock for a day. The harder question is what happens after the noise fades. With traders betting against it, thin profits, and a business built on someone else’s chips, the 220% rally may need real earning power to catch up.

Source: BeInCrypto