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Tech Titans May Save the World

Stocks in this article: IBM INTC MSFT GOOG

NEW YORK ( TheStreet) -- Whoever is betting against the tech sector and pushing the Nasdaq lower today must have missed last night's tech earnings bonanza.

The results posted last night by IBM (IBM), Microsoft (MSFT) and Intel (INTC) revealed two important trends that bode well for the tech sector: companies are spending on hardware and software and demand is growing in emerging markets. The tech sector suddenly seems much healthier than the Nasdaq's 0.12% Friday dip would suggest.

IBM was among the companies reporting results after the markets closed Thursday.

Even Google (GOOG), which missed Wall Street's profit estimate by almost a dollar, surpassed $10 billion in quarterly revenue for the first time on Thursday, citing rapid growth in emerging countries.

Intel also struck a bullish tone during a conference call after market close. "2011 was our most profitable year and a year of record revenues," noted Stacy Smith, the Intel CFO. "We expect continued strength in emerging markets as rising incomes increase the affordability of personal computers."

With other big names such as Dell (DELL), Cisco (CSCO), AMD (AMD) and Symantec (SYMC) yet to report their results, positive comments this week, particularly from IBM, Microsoft and Intel, could bode well for the rest of the sector.

Despite growing concerns about the global economy, particularly debt-ridden Europe, IBM, Microsoft and Intel all beat Wall Street's earnings forecasts, with chipmaker Intel also edging analysts' revenue projections.

Microsoft Chief Financial Officer Peter Klein, for example, said that enterprise spending is helping the software giant deal with a sagging PC market. "The overall business environment remains strong for us," he said.

Revenue from the software giant's Server and Tools business grew 11% year over year, boosted by double-digit growth in Windows Server and SQL Server premium. Sales of Exchange and SharePoint products also climbed 10%, while revenue from its Lync communications software and Dynamics CRM grew by more than 30%.

Still, though, weakening PC sales helped push revenue from Microsoft's Windows and Windows Live division down 6% year over year.

Nonetheless, Microsoft refused to be beaten down by the soft PC market. "In terms of PCs -- there's still growth, we're still in the refresh cycle," explained Klein during the conference call. "Emerging markets will continue to drive PCs."

Intel also put a healthy spin on PCs during its fourth-quarter conference call. The world's biggest chipmaker has thrown its weight behind a new category of super-skinny laptops, dubbed ultrabooks, which it claims will breathe new life into the ailing personal computer market.

"I haven't seen this level of excitement in the customer base since 2003," said Intel CEO Paul Otellini, explaining that more than 70 ultrabooks will launch this spring. "People are very excited about the feature set and having the PC re-energized."

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