Dell Technologies (NYSE:DELL) stock rises 10% as rival Super Micro Computer implodes

Super Micro Computer's (SMCI) pain appears to be Dell Technologies' (DELL) gain.

DELL shares rose as much as 10% on Oct. 30 after rival Super Micro Computer announced that its auditor Ernst & Young had resigned amid a growing accounting scandal at the company. Super Micro Computer produces highly efficient servers used in data centers to run artificial intelligence (AI) applications and models.

News of the auditor's resignation caused SMCI shares to fall 32% that day. However, investors appear to be shifting capital into DELL stock as shares are on track to have their best day in more than six months. While Dell Technologies is best known for its personal computers (PCs), the company also produces highly efficient servers used in data centers and is a direct competitor to Super Micro Computer.

Dell's AI opportunity

Several media including Barronspoint out that Super Micro Computer's problems represent an opportunity for Dell to capitalize. With customer confidence in super micro computers shaken, Dell has an opportunity to gain market share in the fast-growing market for high-efficiency servers used to run AI applications.

Analysts say Dell is positioned to win if customers decide to move away from using Super Micro servers. They point out that many companies such as cloud computing company Coreweave and Elon Musk's xAI currently use both Super Micro Computers and Dell servers, making it easier to move all of their business to Dell.

DELL stock is up 74% so far this year.

Is DELL stock a buy?

Dell Technologies stock is currently rated a “Strong Buy” by 18 Wall Street analysts. This rating is based on 15 Buy and three Hold recommendations made over the past three months. There are no sell ratings for the stock. The average DELL price target of $144.59 implies an upside of 10.19% from current levels.