Why Nvidia, Microsoft, Oracle, Arm, and Other AI Stocks Are Surging Wednesday

Key Takeaways

Shares of AI-related companies surged Wednesday after the Trump administration’s announcement of a $500 billion joint venture with Oracle ( ORCL ), OpenAI, and SoftBank spurred optimism about a rising tide of AI investments.

For Oracle, the project could mean "significant revenue opportunity ahead starting potentially this year,” Morgan Stanley analysts told clients Wednesday, with a portion of the companies' initial $100 billion investment appearing bound for Oracle’s data centers in Abilene, Texas.

The project, known as Stargate, also "reads positively" for Microsoft ( MSFT ) as a backer for OpenAI and partner for the initiative, the analysts said.

Oracle shares jumped close to 8% in intraday trading Wednesday, extending Tuesday's gains ahead of the announcement, while Microsoft shares rose nearly 4%.

As key technology partners for the initiative, Nvidia ( NVDA ) and Arm Holdings ( ARM ) were also among the companies that saw their shares pop, with Arm shares soaring 15%, and Nvidia climbing close to 5%.

Shares of several Nvidia partners and other companies in the AI chipmaker's ecosystem, including Dell ( DELL ), TSMC ( TSM ), and Hewlett Packard Enterprise ( HPE ), gained as well.

Wedbush analysts said they believe the project could also represent “the start of a wave of massive AI investments to take place in the U.S.,” anticipating more announcements in the coming weeks.

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