CDW shares are down about 8.82% to $110.14 in Wednesday trading as the market digests the company’s first-quarter 2026 earnings released on May 6, 2026. The report showed solid top-line growth, but profitability metrics softened, shifting attention to margin trajectory rather than headline revenue strength.

CDW reported Q1 2026 net sales of $5.68 billion, up 9.2% year over year, and non-GAAP diluted EPS of $2.28. However, gross margin fell to 21.0% from 21.6% a year earlier, and operating margin slipped to 6.6% from 7.0%, reflecting a heavier mix and cost pressures including higher compensation and continued investments tied to AI initiatives and workforce costs.

The stock’s reaction suggests investors were positioned for a cleaner profitability picture and are discounting the quarter as a lower-quality beat: revenue accelerated, but gross profit grew slower than sales and operating leverage moved the wrong way. For an IT solutions reseller and services integrator like CDW, margin direction is often treated as the key signal for demand quality, mix (hardware vs. services), and competitive intensity—so even modest compression can trigger an outsized move in the shares.

Attention now shifts to management commentary around the sustainability of infrastructure hardware demand, the mix shift that pressured gross margin, and whether spending on compensation and AI-related initiatives will stabilize in coming quarters. CDW also declared a quarterly cash dividend of $0.63 per share (payable June 10, 2026, to shareholders of record May 25, 2026), but the near-term stock move is being driven more by profitability optics than capital return.