CDW surges 8% on AI-driven earnings beat, strong 2026 outlook
Technology solutions provider beats Q4 estimates as cloud and artificial intelligence services fuel 6.3% revenue growth
CDW Corp shares jumped more than 8% on Wednesday after the technology solutions provider delivered stronger-than-expected fourth-quarter earnings, fueled by robust demand for artificial intelligence and cloud computing services.
The Lincolnshire, Illinois-based company reported adjusted earnings per share of $2.57, comfortably beating analyst estimates that ranged from $2.39 to $2.47. Revenue climbed 6.3% year-over-year to $5.51 billion, surpassing Wall Street expectations of approximately $5.34 billion.
The earnings beat marked a significant rebound for the company, whose shares had tumbled from a 52-week high of $219.61 to as low as $123.08 in recent months. CDW stock closed at $136.71, extending its market capitalization to $16.6 billion and leaving it trading at a discount to the analyst target price of $173.80.
"Customers are increasingly seeking CDW's guidance for their AI initiatives," Chief Executive Officer Christine Leahy said, highlighting the company's strategic position in the rapidly expanding artificial intelligence market. The company's 2025 AI Report indicated that IT leaders are actively deploying AI across various use cases, though many continue to face implementation challenges that create opportunities for solutions providers like CDW.
For the full fiscal year 2025, revenue rose 6.8% to $22.42 billion, driven by particularly strong growth in cloud services, software, and AI-related offerings. The company's strategic partnerships and focus on innovation have positioned it favorably in the competitive IT solutions market, where organizations increasingly seek partners to navigate complex digital transformation initiatives.
Looking ahead to 2026, CDW outlined an ambitious growth strategy centered on artificial intelligence. The company anticipates exceeding the US IT addressable market growth by 200 to 300 basis points, fueled by ongoing investments in AI capabilities and customer-focused solutions. Management emphasized that high-growth sectors like cloud computing and AI will remain core drivers of expansion.
The strong quarterly performance helped ease concerns about CDW's recent deceleration. In the most recent quarter, earnings growth had slipped 5.6% year-over-year, though revenue maintained positive momentum with 4% growth. Wednesday's rally suggests investors are gaining confidence in the company's ability to reignite earnings expansion through its AI-focused strategy.
Analysts remain broadly positive on the stock, with six Buy ratings and five Hold ratings among major brokerage firms. No analysts currently rate CDW as a Sell or Strong Sell, according to recent consensus data. The company's price-to-earnings ratio of 15.82 times trailing earnings represents a premium to the market but a discount to many high-growth technology peers.
The strong reception to CDW's results reflects broader investor enthusiasm for companies with credible AI exposure. As enterprises accelerate their artificial intelligence spending, solutions providers that can guide customers through implementation challenges are emerging as key beneficiaries of the multi-trillion dollar AI infrastructure buildout.