Why Dell stock is rising sharply today

Dell Technologies (DELL 6.95%) The stock posted big gains in Wednesday trading. The company's stock price was up 7.7% as of 2:15 p.m. ET and was up 10.1% at the start of the daily session.

Dell shares are surging today after news broke Super microcomputer'S (SMCI -33.09%) The auditor resigned. Both companies are leading players in the artificial intelligence (AI) server market, and challenges for Supermicro could create opportunities for Dell. Supermicro's share price fell 32.3% at the time of publishing this article.

Dell Soars While Super Micro Computer Flashes Warning Signs

Super Micro Computer today filed a filing with the Securities and Exchange Commission (SEC) indicating that Ernst & Young has resigned as the company's financial auditor. In the resignation letter that Ernst & Young sent to Supermicro, the accounting firm said it would no longer act as the server specialist's auditor because “we have recently become aware of information that we can no longer rely on” management's assurances and the examination committee.”

News of Ernst & Young's departure was the latest major blow to Supermicro shares, which are now 72% below their March peak. As pessimistic sentiment toward its competitor increases dramatically, investors are becoming more optimistic about Dell.

What does the Supermicro controversy mean for Dell stock?

While the issues surrounding Supermicro won't change the underlying performance or competitiveness of its products, they could still create dynamics that ultimately benefit Dell. First, customers could be driven to Dell products if Supermicro is plagued by scandals.

Additionally, investors looking to capitalize on the increasing demand for AI servers may continue to see Dell as the more reliable and attractive opportunity. If Supermicro doesn't find a new accounting firm that can complete the filing of its already delayed 10-K on time, the stock could be delisted from the Nasdaq stock exchange. If that were the case, Supermicro stock could see a huge outflow of investor support – and it's possible that some of that support would flow into Dell stock.