Editorial & Advertiser disclosure

Global Banking and Finance Review is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

Finance

Posted By Global Banking and Finance Review

Posted on January 22, 2025

Europe's industrial stocks rally on Trump's AI investment push

By Alessandro Parodi, Dominique Patton and Zaheer Kachwala

MILAN/PARIS (Reuters) -Global industrial and technology stocks including Oracle and Schneider Electric rallied on Wednesday after U.S. President Donald Trump unveiled a massive artificial intelligence investment push.

Trump on Tuesday announced a private-sector investment of up to $500 billion to fund AI infrastructure, sparking interest in stocks that help build the architecture behind the technology.

Oracle, one of the companies involved in the effort, jumped more than 9.5% in U.S. early market trading. Other AI-linked firms in the U.S. including chip giant Nvidia, Broadcom and Arm gained between 2% and 6.5%.

Microsoft, another partner in the initiative, rose 2%.

In Europe, many of the stocks hit record highs.

French group Schneider Electric, a major supplier of electrical equipment and other infrastructure behind data centers, soared 3.4% to a new high in Paris.

Italian cable maker Prysmian, which last year bought U.S.-based Encore Wire, gained 3.3% to hit a lifetime peak. Germany's Siemens Energy and ABB, which provide electric hardware for AI infrastructure, rose 6.7% and 3.8%, respectively.

"These companies are part of the investment baskets focused on electrification, data centers and energy transportation infrastructure, which benefit from the ongoing trends in AI, electric vehicles and more," said Angelo Meda, head of equities at Banor SIM in Milan.

FUNDING DOUBTS

The Stargate initiative is a joint venture between ChatGPT creator OpenAI, SoftBank, Oracle and other equity backers. It will initially deploy $100 billion and the rest of the funding is expected over the next four years.

SoftBank and OpenAI will lead the project. The Japanese tech investor will have the financial responsibility while OpenAI will take charge of the operations, the ChatGPT maker said.

The plan, however, lacked details on how the money would be spent and did not specify how the firms would source the funds.

It was met with immediate skepticism from rival Elon Musk, who helms xAI and has been one of the most vocal critics of OpenAI, which he co-founded but later left.

"They don't actually have the money," Musk said on X, adding that "he had on good authority" that SoftBank has secured "well under" $10 billion.

Reuters could not independently verify Musk's claims.

Rene Haas, CEO of Arm, told CNBC on Wednesday the consortium is still working out the financial details of Stargate.

Several analysts said they expect more companies to join and most of the funding was likely to come from the joint venture partners. They said the initiative could include projects already in works at some of the companies.

"The founding partners have helped drum up the initial investment and it is very likely this list will be expanded upon," said Ben Barringer, technology analyst at Quilter Cheviot.

"It is interesting that some datacentres are already said to be in construction, and we can assume that some of this has been done using Microsoft and Oracle's capital expenditure. However, we do not yet have enough detail and will need to wait and see how it plays out."

(Reporting by Alessandro Parodi, Dominique Patton and Zaheer Kachwala; Writing by Danilo Masoni; Editing by Amanda Cooper and Arun Koyyur)

Recommended for you

  • Ukraine's military says it shot down 70 out of 151 drones launched by Russia overnight

  • China to roll back clean power subsidies after boom

  • Analysis-Investors return to new-look Middle East, but Trump causes some concern