How do government procurement contracts (GSA schedules, NASPO) benefit IT VARs?

Government procurement complexity: U.S. government agencies (federal, state, local) and educational institutions cannot simply purchase IT products the way a private company can; they must follow procurement laws and regulations requiring competitive bidding for purchases above certain thresholds; purchasing through pre-competed contract vehicles (where vendors have already been evaluated and contracted) is a common way to simplify procurement and comply with regulations. GSA Schedule: the General Services Administration (GSA) Multiple Award Schedule (MAS, sometimes called GSA Schedule 70 for IT) is a pre-competed contract that qualifies vendors to sell to federal agencies; vendors (CDW, PC Connection, Insight Direct) apply to be on the GSA Schedule, agree to specific terms and pricing (which must reflect the vendor's most-favored-customer pricing), and can then sell to any federal agency using simple purchase orders without additional competitive bidding; the GSA Schedule enormously simplifies federal government purchasing. NASPO ValuePoint: for state government, NASPO (National Association of State Procurement Officials) ValuePoint is a cooperative purchasing program that allows state and local governments to purchase from pre-competed contracts at negotiated prices. Why this matters for PC Connection and CDW: government and education customers prefer buying from vendors who have the relevant contract vehicles (simplifying their procurement); vendors without GSA Schedule or NASPO contracts cannot easily sell to government customers; PC Connection and CDW's contract vehicle portfolios are a genuine competitive barrier for smaller IT resellers without these credentials.

What is the 'as-a-service' trend in IT and how does it affect VARs like CDW?

Traditional IT purchasing: historically, companies bought physical IT equipment (servers, PCs, networking gear) as capital expenses; companies owned the hardware and managed it in their own data centers; this created large, lumpy capital purchases every 3-5 years. Cloud and as-a-service shift: cloud computing (AWS, Azure, GCP) allows companies to access IT infrastructure as a service, paying monthly operational expenses rather than capital purchases; similarly, software is increasingly sold as SaaS subscriptions rather than perpetual licenses; endpoint devices are increasingly sold as 'Device as a Service' (monthly subscription including device + support + lifecycle management). Impact on VARs: the shift from hardware purchases to cloud subscriptions could reduce the total dollar volume of IT hardware that VARs like CDW and PC Connection sell; CDW's response has been to build cloud solution capabilities (CDW is a major Microsoft Azure, AWS, and Google Cloud reseller and solution integrator, earning commissions on cloud services) and to grow managed services (CDW manages IT infrastructure for customers on their behalf, creating recurring services revenue); the gross margin mix shift from low-margin product sales to higher-margin services improves profitability even if product revenue grows more slowly. Net effect: CDW and PC Connection are both adapting their business models from pure product resellers to solution providers who sell products, cloud services, and managed services; this transition is positive for margin quality but requires investment in cloud expertise and services delivery capabilities.

How did the COVID-era PC/server surge and subsequent normalization affect IT distributors?

COVID surge (2020-2021): the COVID-19 pandemic created an extraordinary surge in IT product demand; companies needed to rapidly provision remote work equipment (laptops, webcams, collaboration tools) for newly remote employees; schools needed Chromebooks and tablets for remote learning; data centers needed servers and networking equipment to handle surging cloud and video conferencing demand; VARs like CDW and PC Connection experienced exceptional revenue growth (15-25%+ in some periods) from this unprecedented demand surge. Supply chain disruptions: simultaneously, COVID disrupted semiconductor supply chains, causing widespread component shortages; PCs, servers, networking equipment, and storage all had extended delivery times (some products quoting 12-18+ month lead times); this supply constraint further drove customers to order months in advance, building backlogs; distributors who could secure product allocations (benefiting from manufacturer relationships and scale) gained market share. Post-COVID normalization (2022-2023): by 2022-2023, the surge in remote work provisioning had subsided; companies that overbought equipment in 2021 (planning for future growth that didn't materialize) had excess inventory; enterprise IT budgets came under pressure as companies focused on efficiency and profitability; CDW and PC Connection experienced revenue headwinds from this normalization; investors needed to understand that the post-COVID deceleration was a normalization effect, not a structural business deterioration. Long-term trend: the underlying secular trend toward digital transformation, cloud computing, cybersecurity investment, and AI infrastructure continues to drive IT spending; beyond the COVID normalization hangover, enterprise IT spending resumed growth driven by AI server and networking investments for AI infrastructure deployment.

Last updated: August 4, 2026

brimindinvest.com / compare / cnxn-vs-cdwLIVE

CNXN

PC Connection, Inc. · Technology - IT Products Distribution and Solutions

$83.72

+13.40% this month

VERSUS

⟷

COMPARE

CDW

CDW Corporation · Technology - IT Products Distribution and Solutions (Large Cap)

$147.70

+10.74% this month

Scoreboard verdict

Across AI score, momentum, valuation, upside, operating margin

CNXN

1

CDW

3

CDW LEADS 3/5

Comparison scoreboard

CDW LEADS 3/5

AI Score

CNXN 39.5

CDW ✓43.5

1Y Return

CNXN ✓+37.46%

CDW -12.53%

Fwd P/E

CNXN 19.20

CDW ✓12.55

Target Up.

CNXN -3.16%

CDW ✓+3.21%

Op. Margin

CNXN N/A

CDW 6.62%

Metrics last refreshed: 8/4/2026

Quick take

CNXN vs CDW Stock Comparison: AI Score, Valuation, Performance and Upside

CNXN (PC Connection) and CDW are both U.S. IT products distribution and solutions companies — PC Connection is a mid-size IT solutions provider with approximately $3-4 billion in revenue emphasizing relationship-based service for business, enterprise, and public sector customers, while CDW is the largest U.S. IT products distributor at $24B+ in annual net sales with scale purchasing advantages, multi-channel sales, and growing services revenue.

CNXN vs CDW is mid-size IT solutions provider with customer intimacy and public sector contract specialization (PC Connection's relationship-based sales, government/education procurement expertise, and smaller enterprise customer focus — limited purchasing scale vs. CDW's manufacturer leverage) versus large-cap IT distribution leader with scale purchasing power and services growth (CDW's $24B revenue base, preferential manufacturer pricing, multi-channel hybrid sales, and growing managed services margin — IT capex cycle sensitivity and growth rate limitations at scale).

Live analysis · updated 8/4/2026

CDW holds the edge across 3 of 5 key metrics in this comparison. CNXN has delivered stronger 1-year price return (+37.46% vs -12.53%), though CDW has the better forward P/E setup (12.55x vs 19.20x for CNXN). Analyst consensus implies meaningfully more upside for CDW (+3.21%) than for CNXN (-3.16%).

Normalized 1Y performance

CNXN

CDW

Recent returns

CNXN

CDW

Analyst price targets & sentiment

CNXN · 1 analysts

STRONG BUYHOLDSTRONG SELL

Hold (3.0/5.0)

Price target range

analyst low$83.00
analyst high$83.00
analyst mean$83.00
current price$83.72

-3.2% upside to analyst mean

CDW · 11 analysts

STRONG BUYHOLDSTRONG SELL

Buy (1.9/5.0)

Price target range

analyst high$235.00
analyst mean$152.56
current price$147.70

+3.2% upside to analyst mean

Who should consider this stock?

CNXN may suit investors who:

→Want smaller-cap IT distribution exposure through a relationship-focused solutions provider with public sector (government and education) contract vehicle specialization and customer intimacy advantages
→Value PC Connection's capital return programs (dividends and share buybacks) funded by steady cash generation from the IT distribution business
→Prefer a simpler, more focused IT distribution business vs. CDW's larger, more complex multi-segment, multi-country operation

CDW may suit investors who:

→Want large-cap IT distribution exposure through the dominant U.S. IT products reseller with significant scale purchasing advantages, multi-channel sales capabilities, and growing services revenue
→Value CDW's consistent free cash flow generation used for dividends, share buybacks, and acquisitions that has driven strong long-term total shareholder returns
→Believe CDW's growing services and cloud adoption capabilities position it to benefit from the enterprise digital transformation trend beyond simple hardware reselling

Performance & AI score

Performance & AI score
Metric	CNXN	CDW
AI score	39.5	43.5
AI rank	#1139	#794
Latest close	$83.72	$147.70
1M return	+13.40%	+10.74%
6M return	+45.04%	+16.46%
1Y return	+37.46%	-12.53%

$10,000 invested — hypothetical growth (dividends reinvested)

How much would $10,000 be worth today if invested at the start of each period, with all dividends reinvested?

$10,000 invested — hypothetical growth (dividends reinvested)
Period	CNXN	CDW
1Y ago	$13.9K (+39.0%) started 2025-07-31	$8.58K (-14.2%) started 2025-08-04
5Y ago	$20.05K (+100.5%) started 2021-08-02	$8.46K (-15.4%) started 2021-08-05
10Y ago	$39.58K (+295.8%) started 2016-08-01	$40.57K (+305.7%) started 2016-08-05

Hypothetical — past performance does not guarantee future results.

Valuation & upside potential

Valuation & upside potential
Metric	CNXN	CDW
Market cap	$2.16B	$17.02B
Trailing P/E	22.67	18.03
Forward P/E	19.20	12.55
Price/Sales	0.72	1.10
EV/Revenue	0.61	1.07
Analyst target	$83.00	$152.56
Target upside	-3.16%	+3.21%

Growth, profitability & risk

Growth, profitability & risk
Metric	CNXN	CDW
Revenue growth	12.40%	9.20%
Earnings growth	35.10%	7.70%
EPS growth	+35.10%	+7.70%
FCF margin	+0.40%	+3.86%
Operating margin	N/A	6.62%
Profit margin	3.21%	4.70%
ROIC proxy	10.43%	44.16%
Return on equity	10.43%	44.16%
Dividend yield	0.96%	1.70%
Beta	0.87	0.96
Debt/equity	0.79	240.52
Current ratio	2.88	1.17
Quick ratio	2.38	1.01

Drawdown & downside risk

Lower drawdown and smaller single-period drops generally indicate a smoother ride, though they do not guarantee lower future risk.

1Y risk snapshot

CNXN max drawdown16.91%

CDW max drawdown42.31%

CNXN max wkly drop6.26%

CDW max wkly drop27.41%

5Y risk snapshot

CNXN max drawdown30.25%

CDW max drawdown61.02%

CNXN max wkly drop19.59%

CDW max wkly drop27.41%

10Y risk snapshot

CNXN max drawdown41.74%

CDW max drawdown61.02%

CNXN max wkly drop26.58%

CDW max wkly drop27.41%

Performance metrics by period

Performance metrics by period
Period	Metric	CNXN	CDW
1Y	Growth	+37.46%	-14.20%
	CAGR	+37.49%	-14.23%
	Sharpe ratio	1.20	-0.25
	Max drawdown	16.91%	42.31%
	Max daily drop	4.58%	20.32%
	Max wkly drop	6.26%	27.41%
5Y	Growth	+89.34%	-19.09%
	CAGR	+13.64%	-4.15%
	Sharpe ratio	0.43	-0.12
	Max drawdown	30.25%	61.02%
	Max daily drop	13.99%	20.32%
	Max wkly drop	19.59%	27.41%
10Y	Growth	+254.85%	+265.09%
	CAGR	+13.51%	+13.83%
	Sharpe ratio	0.41	0.43
	Max drawdown	41.74%	61.02%
	Max daily drop	27.74%	20.32%
	Max wkly drop	26.58%	27.41%

Business comparison

Business comparison
Category	CNXN	CDW
Company	PC Connection, Inc.	CDW Corporation
Sector	Technology - IT Products Distribution and Solutions	Technology
Industry	N/A	Information Technology Services
Core business	PC Connection is a technology solutions company providing a wide range of IT products (PCs, servers, networking equipment, storage, peripherals, and software) along with professional services (cloud solutions, security, collaboration, data center services) to business, government, education (GOV/ED), and healthcare customers. PC Connection operates through three segments: Business Solutions (serving commercial and mid-market businesses); Enterprise Solutions (serving large enterprise and financial services companies); and Public Sector Solutions (serving government and education customers). PC Connection generated approximately $3-4 billion in net sales. As an IT products reseller, PC Connection earns gross margins in the 12-15% range on products and higher margins on professional services.	CDW Corporation is the largest U.S.-based IT solutions provider by revenue, generating $24+ billion in annual net sales. CDW provides IT products (hardware, software, cloud solutions, networking, security) and integrated IT solutions to four primary customer segments: Corporate (large and mid-size businesses); Small Business (companies with fewer than 250 employees); Public (government, education, healthcare); and Other (UK/Canada international operations). CDW serves approximately 250,000 customers annually and employs approximately 15,000 coworkers. CDW's scale provides significant purchasing advantages with tier-1 manufacturers (Dell, HP, Cisco, Microsoft, Apple); CDW is one of the largest channels for these manufacturers' products.
Investor focus	Investors track PC Connection's net sales growth across segments (particularly the premium-margin enterprise and public sector segments), gross margin trajectory as services mix increases, and capital returns (dividends and share buybacks).	Investors track CDW's net revenue growth across segments, gross margin stability (typically 18-20% as services mix grows), non-GAAP earnings per share growth, and cash generation (CDW uses free cash flow for dividends, buybacks, and acquisitions).

CNXN strengths

→Specialized segment structure serves distinct customer types effectively — PC Connection's three segments (business, enterprise, public sector) allow dedicated sales teams and specialized expertise for each customer type; government and education customers have different procurement processes, contract vehicles, and budget cycles that PC Connection specializes in
→Public sector (GOV/ED) business provides stable recurring demand with government procurement contracts — government and education institutions purchase IT equipment and services through multi-year contract vehicles (state contracts, GSA schedules, NASPO); these contracts provide PC Connection with a defined pipeline of government IT spending
→Small and mid-size company scale allows faster customer responsiveness and relationship-based service vs. large distributors — PC Connection's smaller scale relative to CDW creates customer intimacy; account managers can be more responsive and develop deeper relationships with mid-size business customers

CDW strengths

→Scale advantages in purchasing power and manufacturer relationships provide competitive cost advantages — CDW's $24B+ revenue makes it one of the largest customers for Dell, HP, Cisco, and Microsoft; this scale provides preferential pricing, priority product allocation (critical during shortages), marketing development funds, and early access to new products
→Multi-channel sales model (field sales, inside sales, e-commerce) serves all customer types efficiently — CDW's hybrid sales model allows it to serve large enterprise customers through dedicated account executives, mid-market customers through inside sales, and small businesses through online self-service; this versatility is difficult for smaller competitors to replicate
→Services revenue growth (professional services, managed services, cloud) improves gross margin quality — services carry significantly higher gross margins than product reselling; CDW's growing services attach rate on product deals improves overall profitability; services also increase customer stickiness

Risks to watch — CNXN

→PC Connection is significantly smaller than CDW, limiting scale advantages in purchasing and operations — PC Connection's $3-4B revenue is approximately 1/6th of CDW's $24B+; smaller scale means less purchasing leverage with manufacturers (HP, Dell, Cisco, Microsoft), potentially higher unit costs
→IT spending cycles affect revenue — PC Connection's revenue is highly correlated with corporate IT spending cycles; when companies reduce IT budgets (recession, cost-cutting), PC Connection's product revenue declines; services mix reduces but doesn't eliminate this cyclicality
→Margin pressure from online competition (Amazon Business, direct manufacturer sales) — large IT buyers can purchase directly from manufacturer websites or Amazon Business; PC Connection must provide value-added services, specialized support, and contract vehicle access to justify its role

Risks to watch — CDW

→Large scale creates difficulty accelerating growth rates — CDW's $24B baseline requires adding $2+ billion in new revenue annually to achieve 8-10% growth; at this scale, meaningful revenue acceleration is difficult
→Dependence on IT spending cycles — CDW's revenue is significantly correlated with enterprise IT capital spending; macroeconomic downturns reduce corporate IT budgets, directly impacting CDW's revenue; 2023 saw IT spending headwinds as companies moderated post-COVID excess purchases
→Competition from direct manufacturer online stores and Amazon Business — manufacturers increasingly sell direct to large enterprise customers; Amazon Business serves small and mid-size purchasing efficiently; CDW must continuously demonstrate value (solution expertise, account management, contract vehicles) to justify its intermediary role

Frequently asked questions

VAR definition: a Value-Added Reseller (VAR) is a company that purchases technology products from manufacturers (Dell, HP, Cisco, Apple, Microsoft) and resells them to end-user customers (businesses, government agencies, schools) at a markup, often adding services, customization, configuration, and support that justify the markup vs. buying directly. Revenue model: VARs earn gross margin on the difference between their product purchase cost and their selling price; IT product gross margins are typically 8-18% depending on the product category (commodity hardware like laptops at the low end, networking equipment and software at the higher end); services (professional services, implementation, managed services) carry much higher gross margins (30-50%); the trend toward services and software in IT spending is positive for VAR gross margin profiles. Why manufacturers use VARs: manufacturers like Cisco and Dell rely on VARs to reach thousands of small and mid-size customers that are too numerous and geographically dispersed for the manufacturer's own sales force to cover efficiently; VARs provide local expertise, competitive bidding, solution design, and post-sale support that the manufacturer's direct sales cannot provide at scale; manufacturers provide VARs with product training, certifications (e.g., Cisco Gold Partner, Dell Titanium Partner), and marketing development funds (MDF) to support VAR sales. Value added by CDW and PC Connection: aggregating from multiple manufacturers (customers can source Dell, Cisco, Microsoft, and HP from one vendor with one invoice); contract vehicle expertise (government and education procurement through specific contract vehicles); solution design (helping customers configure the right IT architecture); financing options; lifecycle management (asset tracking, refresh planning).

AI Prediction SignalNext 5 trading days

Members only

CNXN

+2.8%BUY

CDW

+1.1%HOLD

Start Free Trial Log in

ML model trained on historical prices · 14-day free trial · No credit card required

Free public comparison

Want deeper AI forecasts?

This comparison page is public and free forever. Subscribers can unlock saved watchlists, full AI rankings, detailed forecasts, and interactive analysis tools.

Start Free Trial Read Investing Guides

More comparisons