Why Arm Holdings Stock Is Skyrocketing Today

Shares of Arm Holdings (NASDAQ: ARM) are soaring Wednesday. The stock is up 14.5% as of 11:50 a.m. ET, gaining as much as 17.8% earlier in the day. The leap comes as the S&P 500 and the Nasdaq Composite gained 0.7% and 1.3%, respectively.

Arm is benefiting from the recent announcement of a new artificial intelligence (AI) investment initiative from the Trump administration as well as a rollback of AI regulations.

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Project Stargate will bring billions

President Trump announced a new project -- dubbed Project Stargate -- that will bring billions of dollars in private investment to the AI industry. Arm will be a direct recipient of Project Stargate and will also benefit downstream from its partner, Oracle, one of the key players in the deal. Project Stargate will, in part, help fund the building of Oracle AI data centers -- good news for Arm, whose technology is featured heavily in the servers that fill these data centers.

Investors were further convinced by an interview on CNBC in which Arm's CEO discussed the financial details of Arm's part in Project Stargate as well as his company's continued relationship with SoftBank, the central financier of Project Stargate.

Trump reverses a host of Biden's orders

Trump signed an executive order reversing a slew of executive orders of the Biden era, calling them "harmful." Among these were certain regulations aimed at keeping AI safe, including the requirement that companies in the space report developments to federal regulators. Trump's new order does away with these requirements, and boosted AI stocks across the board.

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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Oracle. The Motley Fool has a disclosure policy.