Stocks tied to the artificial intelligence industry surged higher Wednesday following President Trump’s announcement of a new joint venture, called “Stargate,” which plans to invest $500 billion to build new AI infrastructure in the United States.
SoftBank 9984, ChatGPT developer OpenAI, Oracle ORCL, and MGX (a tech investment firm based in the United Arab Emirates) are the initial funders of the project, according to an announcement from OpenAI. Arm Holdings ARM, Microsoft MSFT, Nvidia NVDA, Oracle, and OpenAI are listed as technology partners. The news sent stocks in those firms soaring, with shares of Arm closing nearly 16% higher on Wednesday. Shares of SoftBank climbed nearly 11%, Oracle gained 6.7%, Nvidia gained 4.4%, and Microsoft gained 4.1%.
Gains were more muted across the broader AI industry, with the Invesco AI and Next Gen Software ETF up 1.4% on Wednesday afternoon and the iShares A.I. Innovation and Tech Act ETF up 2.2%.
The Morningstar US Market Index gained 0.5% Wednesday, with the bulk of those gains coming from the large-cap growth category. Small-cap and value stocks saw losses.
Trump Announcement Bullish for AI Buildout, but Details Are Vague
According to the announcement, Stargate will begin with an initial investment of $100 billion, with more to come over the next several years. Demand for the physical infrastructure to support AI computing, like data centers, computer chips, and electricity, is expected to continue growing as the technology develops.
“Overall, this is bullish for a continuing AI-focused infrastructure buildout, and we were already fairly confident that spending was locked in for 2025 even before this announcement,” says Eric Compton, Morningstar director of equity research, technology. “It also does not come as a surprise after Trump’s previous comments that he wanted to make the United States a global leader in AI.”
Compton emphasizes that the details of the project remain vague, and the announcement contained few assurances about how the investments will be funded and how much funding is guaranteed. Even so, he says, “We see 2026 spending as the next key battleground for deciphering the size and staying power of the current AI boom. The battle for 2025 already seems over, and AI won.”
Mark Hackett, chief market strategist at Nationwide, adds that a lack of clarity surrounding developments like this can contribute to outsized stock swings. “Today’s rally is an example of that, as administration comments are supportive but don’t represent a tangible, fundamental inflection point,” he explains. “The stocks are subject to pendulum swings as investors contemplate information and price in risks and rewards.”
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar's editorial policies.