Dicker Data Ltd (ASX: DDR) shares have extended their recent rally on Tuesday, reaching their highest level in a year.
The Dicker Data share price climbed as high as $11.95 during mid-afternoon trade before easing slightly.
At the time of writing, the ASX tech share is up 1.97% to $11.92.
That takes its one-month gain to around 35%, while shareholders have enjoyed a rise of more than 50% over the past year.
So, what has investors buying Dicker Data shares?
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Strong start to FY26
The recent rally followed a strong trading update released at Dicker Data's annual general meeting (AGM) in late May.
For the first 4 months of FY26, unaudited gross revenue increased 13.4% to $1.27 billion.
Gross operating profit surged 19.3% to $120.9 million, while EBITDA climbed 32% to $58.2 million.
Net profit before tax delivered the biggest increase, jumping 45.5% to $47.3 million.
Management said the result was driven by stronger demand for endpoint products, software, and data centre refresh projects.
Margins also improved as the company sold through older inventory purchased at lower prices.
Tech spending is lifting demand
Dicker Data distributes hardware, software, and cloud products from major global technology vendors to more than 10,000 reseller partners across Australia and New Zealand.
This gives the company exposure to several areas of technology spending without needing to develop the products itself.
Demand is currently being supported by businesses replacing older computers, investing in data centres, and spending more on artificial intelligence (AI) infrastructure.
Software has also become a larger part of the business, with gross software sales increasing 21% during FY25 to around $1.17 billion.
Dicker Data has also added new vendors across cybersecurity, data management, and networking, expanding the range of products available to its reseller partners.
Management expects the strong end-of-financial-year trading period to support momentum through the first half. However, it warned that higher vendor prices and inventory replacement costs could weigh on demand later in the year.
Has the rally gone too far?
The strong trading update helps explain the recent rally, but a 35% rise in one month has also lifted expectations.
Dicker Data shares are now trading above several broker price targets published before the latest rally.
Morgan Stanley upgraded the stock to 'overweight' in late May and raised its target to $11.10.
UBS also lifted its valuation to $11.20, while Jarden has a buy rating and an $11 price target.
However, Macquarie is more cautious, with a neutral rating and a target of $10.35.
Only time will tell if Dicker Data shares have more room to run.
