Appen share price soars 8% as Big Tech boom builds

Tech is back in the spotlight.

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The Appen Ltd (ASX: APX) share price has surged from the open today and is firmly in the green.

Shares in the ASX tech company are swapping hands at $2.30 apiece at the time of writing, 7.75% higher on the day despite no price-sensitive announcements.

However, there are reports of fresh investment flows into artificial intelligence (AI) projects from big tech companies in the United States.

Now, with the US Presidential election decided and new policies promoting deregulation, these companies are racing to expand their AI capabilities.

This momentum spells new opportunities for companies like Appen as tech giants rely on accurate data to develop their AI tools. Let's take a look.

Big Tech's deregulation: Good for the Appen share price?

The latest US government stance on tech deregulation appears to be a big win for big tech companies, especially in AI.

By loosening the reins, experts say that policymakers have opened doors for faster, bolder AI expansion.

Tech giants now have more freedom to build, test, and launch AI tools without as many regulatory checks. And the market has started to pay attention. Loftus Peak said the 'tech bros' are back in the hot seat, according to The Australian.

It's a massive sugar hit. Less regulation, less red tape. It's a crypto, Elon Musk, (PayPal founder) Peter Thiel, Palantir kind of day.

The 'tech bros' are back in the ascendancy.

So, what does this all mean for ASX tech stocks like Appen? The company's share price is rocketing today alongside the S&P/ASX All Technology Index (ASX: XTX), which has set new highs in today's trading.

Tech stocks, in general, have caught a bid today as investors pile into stocks, buoyed by the fresh post-election sentiment.

But how could Appen specifically benefit?

Its specialised data labelling and annotation services could play a central role here, in my opinion.

AI projects need vast amounts of labelled data to train their algorithms, and Appen's services enable tech companies to meet these requirements at scale.

Whether or not this will elicit buying from long-term investors is a matter of debate. But even if tech is rallying as a result of the election, the Appen share price can still benefit.

Capital injection onto the balance sheet

The Appen share price isn't just relying on the rising tide of big tech's AI ambitions. The company is gearing up to take advantage of it.

Recently, Appen raised $15 million through a heavily oversubscribed Share Purchase Plan (SPP), where it received commitments north of $20 million.

This follows a $50 million institutional placement earlier in the year.

The funds provide Appen with the flexibility to grow, especially in areas like generative AI, which is gaining popularity in the US. Shareholders were diluted in both instances.

Appen's management said these subscriptions "highlight investor confidence" in the company's growth outlook.

Foolish takeaway

The Appen share price is rallying today as US tech finds itself once again in the spotlight after the US election.

In the last 12 months, Appen stock is up more than 151%.

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Appen. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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