(Reuters) - Shares of chipmakers jumped on Monday as Microsoft's ( MSFT ) plan to invest $80 billion in AI-enabled data centers in fiscal 2025 spurred bets that semiconductor demand would remain strong.

Micron was the biggest gainer among semiconductor stocks with a 10% rise, while chip-making equipment companies like Applied Materials ( AMAT ), Lam Research ( LRCX ) and KLA Corp ( KLAC ) rose between 5.3% and 6.1%.

The Philadelphia Semiconductor Index firmed 4% and hit its highest since mid-October.

Citigroup said Microsoft's ( MSFT ) spending plan although in line with analysts' estimates was a "modest positive" update as it removed the risk of a drop in capital expenditure.

"AI data centers are very chip hungry, that's why you have people running towards the chip sector right now," said Michael Matousek, head trader at U.S. Global Investors.

Contract manufacturer Foxconn's record revenue for the fourth quarter on the back of strong demand for AI servers also added to the overall euphoria in the chip sector.

Nvidia ( NVDA ), a Foxconn customer, added 4.6%. The AI bellwether's CEO, Jensen Huang, is set to deliver a keynote speech at the CES trade show later in the day. AI server maker Super Micro Computer ( SMCI ) jumped 9.9%.

(Reporting by Medha Singh and Purvi Agarwal in Bengaluru; Editing by Anil D'Silva)