Micron Technology Inc. (MU) witnessed a remarkable 5.05% surge in its stock price during Tuesday's pre-market trading session, fueled by growing optimism surrounding the booming artificial intelligence (AI) industry and the rising demand for the company's high-performance chips powering AI systems and data centers.

The pre-market rally was driven by a flurry of positive news highlighting the crucial role semiconductor companies like Micron are playing in the AI revolution. Investors are betting big on Micron's prospects as tech giants like Microsoft pledge massive investments to build AI-enabled data centers, fueling demand for the company's cutting-edge memory solutions.

According to reports, Microsoft plans to invest a staggering $80 billion in fiscal 2025 to develop AI data centers capable of training AI models and deploying cloud-based applications. This move is expected to significantly boost demand for Micron's advanced chips, which are already incorporated into AI powerhouses like Nvidia's latest processors unveiled at the CES 2025 conference.

The optimism surrounding Micron's growth prospects was further bolstered by Foxconn, a major electronics manufacturer and supplier to companies like Nvidia and Apple, posting record revenue in the fourth quarter driven by strong demand for AI servers. This development underscores the robust growth in the AI infrastructure market, which bodes well for chipmakers like Micron that provide essential components for these systems.

Analysts are bullish on Micron's long-term prospects, highlighting the company's potential to capitalize on the expanding high-bandwidth memory (HBM) market, which is projected to skyrocket from $16 billion in 2024 to over $100 billion by 2030. With Micron's HBM technology being a key component in Nvidia's latest AI chips, the company appears well-positioned to benefit from the escalating AI demand.