Intel's Higher Revenue Outlook Boosts Tech Sector Hopes

When Intel Corp. updated - and upgraded - its third-quarter sales guidance forecast on Friday, the enthusiasm echoed through Wall Street and Silicon Valley. The size of the increase was jolting: in July the chip-maker said it expected quarterly sales of $8.1 to $8.9 billion. Now it expects revenue to hit $9 billion plus or minus $200 million. Intel cited "stronger-than-expected demand for microprocessors and chip sets." Although the new target level corresponds with the high end of the earlier forecast, the stronger guidance along with Intel's higher gross margins are seen as a good sign of the market stabilization. If the company meets its new forecasts, its revenues for the current quarter will be 8.9% higher than the three months ended June 30.

With Intel's sales increasingly tied to consumer electronics products, analysts agree that the outlook will continue strong through the second half of 2009, traditionally an upbeat buying period with back-to-school and holiday shopping cycles.