Trump’s Second Term: A New Era for Technology and AI
President Donald Trump has started his second term by signing several executive actions with significant economic potential. Corporate leaders, particularly from the tech sector, are paying close attention. Notably, tech executives like Meta CEO Mark Zuckerberg, Amazon CEO Jeff Bezos, and Alphabet CEO Sundar Pichai were seated in prestigious positions at his inauguration, typically reserved for family and VIPs.
Following Trump’s re-election, the technology and cryptocurrency markets experienced record highs in November.
Deregulation Fuels AI Expansion
One of the President’s initial executive orders aimed to eliminate regulations on artificial intelligence (AI) set by the prior administration. This decision intends to “clear a path for the United States to act decisively to retain global leadership in artificial intelligence,” the order states. This deregulation is expected to accelerate AI development and innovation.
Generative AI has gained prominence since Trump’s first term, which saw efforts like the American AI Initiative he introduced on Feb. 11, 2019. This initiative promised to double funding for AI research and established national AI research institutes.
Additionally, a plan for AI technical standards was included, along with directives for the federal government’s AI usage. On Dec. 3, 2020, another executive order promoted trustworthy AI in government operations, laying the framework for a potential upswing in AI-focused stocks and ETFs during Trump’s leadership.
In January, President Donald Trump announced a $500 billion AI infrastructure initiative and introduced a new company named Stargate. Initial funds will come from firms like SoftBank (SFTBY), OpenAI, Oracle (ORCL), and MGX from the UAE, aiming to boost AI research and development over the next four years.
Market Reactions and Investor Outlook
Although some investors express concerns over Trump’s overall economic strategy — which includes mass deportations, deregulation, and tariffs — the tech sector stands out as a key beneficiary of his upcoming term. With both the House and Senate in Republican hands, an aggressive pro-business agenda is anticipated, creating an environment conducive to tech firm growth and innovation.
Possible Changes in Antitrust Regulation
During Biden’s presidency, antitrust actions aimed at industry giants like Google, Amazon, and Apple were prominent, with the FTC working to mitigate their market power. Trump’s approach seems to lean towards leniency regarding Big Tech breakups. This perspective could impact ongoing antitrust cases, particularly those involving Alphabet’s Google GOOGL and its search dominance.
While Trump may continue some antitrust actions that began during his initial term, he has voiced doubts about splitting Google. In October, he raised concerns about whether dismantling Google could cause the company excessive harm. As a result, we may see tech stocks remain well-positioned during Trump’s second term.
Keep an Eye on Tech ETFs
As a further indication of the tech sector’s strength under Trump, investors should monitor exchange-traded funds (ETFs) such as Vanguard Information Technology ETF VGT, Technology Select Sector SPDR Fund XLK, iShares U.S. Technology ETF IYW, Fidelity MSCI Information Technology Index ETF FTEC, and iShares Expanded Tech-Software Sector ETF IGV.
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Alphabet Inc. (GOOG): Free Stock Analysis Report
Amazon.com, Inc. (AMZN): Free Stock Analysis Report
Technology Select Sector SPDR ETF (XLK): ETF Research Reports
Alphabet Inc. (GOOGL): Free Stock Analysis Report
Fidelity MSCI Information Technology Index ETF (FTEC): ETF Research Reports
iShares U.S. Technology ETF (IYW): ETF Research Reports
Vanguard Information Technology ETF (VGT): ETF Research Reports
iShares Expanded Tech-Software Sector ETF (IGV): ETF Research Reports
Meta Platforms, Inc. (META): Free Stock Analysis Report
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
