A renewed wave of optimism swept through semiconductor stocks late on Wednesday after upbeat forecasts from Micron Technology and Qualcomm reignited confidence in the artificial intelligence (AI) trade, adding more than $400 billion to the combined market value of chipmakers, according to Reuters.Micron Technology led the rally, surging 12% in extended trading after projecting quarterly earnings above Wall Street expectations. According to Reuters, the company's stronger-than-expected outlook reflects robust demand for memory chips as technology firms continue investing heavily in AI infrastructure and next-generation data centers.Qualcomm also boosted investor sentiment after unveiling ambitious growth targets for its data center business. The company expects its data center segment to generate $15 billion in annual revenue by 2029, underscoring its strategy to diversify beyond its traditional smartphone chip business and capitalize on the expanding AI ecosystem.The positive outlook spilled over to the broader semiconductor sector. Memory storage rivals Western Digital, Sandisk and Seagate Technology climbed more than 8% in after-hours trading, benefiting from expectations of sustained demand for AI-related hardware.Other AI-linked semiconductor names also advanced, with Arm Holdings gaining around 6%, Marvell Technology rising nearly 4%, and Broadcom adding about 2%.Suppliers of semiconductor manufacturing equipment also participated in the rally. Applied Materials and ASML each rose more than 4%, reflecting investor confidence that continued AI-driven chip demand will translate into higher spending on advanced manufacturing tools.The sharp rebound comes after a period of growing skepticism surrounding AI-related stocks. Reuters noted that investors had become increasingly concerned that valuations across the sector had risen too quickly following years of strong gains. The PHLX Semiconductor Index had fallen 8% on Tuesday amid fears that the massive investments required to build AI data centers could take longer than expected to generate meaningful revenue and profits.Despite the recent volatility, the sector's longer-term performance remains impressive. Reuters reported that the PHLX Semiconductor Index is still up about 90% so far in 2026. Micron has been one of the standout performers, with its shares gaining more than 260% year-to-date even before Wednesday's after-hours rally, highlighting the market's continued confidence in companies positioned to benefit from the AI boom.