CDW Shares Trail the S&P 500 Despite a Recent Rebound

CDW shares have staged a sharp rebound since late May, climbing 16.4% over the past three months through September 14, compared with a 3.6% gain for the S&P 500. That recovery has not erased the bigger gap. Over the preceding 52 weeks, CDW fell 6.3%, while the benchmark rose 16.2%, according to Barchart.

The contrast explains why the stock remains a laggard even as momentum has improved. CDW has traded above its 200-day moving average since July and reclaimed its 50-day average in August, suggesting that buyers have returned after a steep selloff. The question is whether the move marks a durable reset or simply a technical bounce.

The company’s latest operating results offer ammunition for both sides. CDW reported second-quarter 2026 revenue of $6.57 billion, up 10% from a year earlier, as customers increased spending on storage, servers, notebooks, software and networking equipment. Government revenue rose 13.6%, while commercial sales advanced 9.2%. International revenue from Canada and the United Kingdom jumped 22.9%.

Profit growth was less forceful. Gross profit increased 6.3%, but gross margin slipped to 20.1% from 20.8% as product mix shifted toward lower-margin hardware categories. Operating income grew just 2%, although non-GAAP earnings per share rose 11.9% to $2.91. The pattern is familiar for distributors: strong demand can lift revenue while still pressuring profitability if hardware accounts for more of the sales mix.

CDW is trying to push investors toward a higher-value story through services, cloud projects, data modernization and artificial intelligence. Its planned acquisition of Lovelytics, valued at approximately $525 million, is designed to deepen those capabilities, though management said the deal will not materially affect 2026 results and expects it to close in the third quarter.

Wall Street has not abandoned the stock. Eleven analysts tracked by Barchart carry a consensus “Moderate Buy” rating, with an average price target of $158.60, implying roughly 5.2% upside. That restrained target suggests investors want proof that CDW can convert AI and infrastructure demand into sustained margin expansion, not just another quarter of higher sales.