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Shares of Micron Technology Inc. (MU, Financial) surged 11% on Monday as investor sentiment in the highly cyclical semiconductor sector blossomed. That jump is fueled by a burst of momentum across the market, including in artificial intelligence (AI) technologies, a telling sign of a strong future for so many companies, including Micron.
High demand for AI-enabled products has fueled Micron's leadership position in the semiconductor space, which has made the rally very intertwined with the company's leadership. More importantly, Microsoft's announcement of an $80 billion investment for data centers focused on AI in fiscal 2025 has driven up the need for semiconductors. Micron is seen as important in meeting that demand; investors see more than a 10% rise in the stock here.
The broader semiconductor market also took off, with the Philadelphia Semiconductor Index jumping 4% to its highest reached since mid-October, showing mounting investor optimism. This upbeat sentiment helped Micron, and its stock price stayed in growth mode.
The news was also good for the sector, with star performer Foxconn reporting record revenues in AI servers, helping investors to see what Micron could get away with. While many of the developers of AI technology are semiconductor companies such as Micron the outlook is still bright, and most anticipate continued growth into 2025 and beyond.
This article first appeared on GuruFocus.