Micron Technology's stock surged 5.03% in after-hours trading on Wednesday, marking a significant rebound from earlier session losses. The semiconductor maker was among several chip and storage stocks that rallied following a major announcement from Alphabet.

The rally was triggered by Alphabet's statement that it could double its capital expenditure this year as the Google parent company aggressively ramps up investments to advance in the artificial intelligence race. This announcement signaled increased demand for AI infrastructure components, including memory chips where Micron is a key player.

Analysts note that Micron stands to benefit from the growing demand for High Bandwidth Memory (HBM) in AI applications, with HBM3E capacity effectively sold out and demand exceeding supply. The broader context of potential Federal Reserve policies under consideration could further support AI infrastructure investments, creating favorable conditions for semiconductor companies building the physical backbone of the AI economy.