Updated from 7:53 a.m. ESTIntel's ( INTC) shares remained strong in Wednesday's premarket session as Wall Street sighed with praise for the chip giant's fourth quarter. The stock recently fetched $23.20, up 66 cents, or 2.9%, from Tuesday's close. Piper Jaffray raised its investment rating to outperform from neutral, while Merrill boosted its 2005 earnings estimate to $1.21 a share from $1.06. After the bell Tuesday, Intel reported a 2% year-over-year decline in fourth-quarter earnings to 33 cents a share on a 10% jump in revenue to $9.6 billion, beating estimates on both lines. In addition, the Santa Clara, Calif.-based company predicted first-quarter sales between $8.8 billion and $9.4 billion, representing a potential sequential drop 2% to 8.3%, but providing room for substantial upside over analysts' expected sales of $8.94 billion. First-quarter sales typically drop 5% to 7% at Intel. "They are taking a fairly cautious tack," said analyst Cody Acree with Legg Mason Wood Walker. "Typically, a seasonal decline entails both a rollover of internal demand and inventories have to be depleted, but they have already taken inventories down. This is a very realistic number and possibly a conservative number as well." "A lot of negative news has been priced in and most of what Intel reported could be interpreted as positive," said Pam Hegarty, global technology team leader for Baring Asset Management, which has about $32 billion under management. She said Intel shares are currently trading at the low end of what she considers a "reasonable valuation range." Intel President Paul Otellini, who will take over as chief executive in March from Craig Barrett, said the company is expecting PC units to grow by double-digit percentages in 2005. This is more optimistic than current industry estimates, most of which peg PC growth in the low-to-mid-single-digit percentage range. "I take it with a grain of salt because as they plan for production levels they are better off overshooting than undershooting, but to expect a double-digit unit-shipment rate for PCs is a pretty bullish statement," said Hegarty.