IBM, Dell, Google, Intel: Is Rebound Nigh?

Investors will be closely monitoring IBM ( IBM), Intel ( INTC), Google ( GOOG) and Dell ( DELL) this week for signs of a long-awaited tech rebound.

With a major question mark hanging over IT spending for most of this year, investors are desperate to see any green shoots, and the quarterly results at IBM and Intel will be under the microscope.

IBM has not offered guidance for the second quarter, but it backed its full-year profit forecast during its recent annual analyst event. Boosted by cost cuts and strong profit margins in services and software, the tech giant reiterated its projection of $9.20 a share.

"In today's challenging economic climate, this earnings growth is very impressive," wrote Brian Marshall, an analyst at Broadpoint AmTech, in a recent note, but warned that there are plenty of hurdles in IBM's path. "We are concerned about the timing of broad adoption of cloud-based options, as well as the longer-term negative implications of increased competition, primarily from H-P and Cisco."

Goldman Sachs expects that IBM's June quarter will look very similar to its first-quarter, when the firm's revenue came in slightly below Wall Street's expectations.

Analysts surveyed by Thomson Reuters expect IBM to post earnings of $2.02 a share and revenue of $23.58 billion when it reports after market close Thursday. The Armonk, N.Y.-based firm posted earnings of $1.98 a share and revenue of $26.8 billion in the same period last year.

Another tech firm in the spotlight this week is Intel, which reports its second-quarter results Tuesday. The chipmaker, which recently saw its stock hit a 2009 high, is seen as a key indicator of the health of the tech sector, particularly the PC market.

Rival Marvell ( MRVL) has already made some noises about a possible tech turnaround, and there have been rumblings of solid second quarter at Intel.

Bank of America/Merrill Lynch recently upgraded Intel to a "buy" rating, highlighting improving demand that could drive margins higher. OptionMonster, however, also predicted that Intel's stock could get cheaper in the future, presenting better buying opportunities to shrewd investors.

Citing continued economic uncertainty, Intel did not offer second-quarter guidance although, for internal purposes, the firm expects that revenue will be flat compared to the first quarter's $7.1 billion. Analysts surveyed by Thomson Financial expect the firm to post earnings of 8 cents a share and revenue of $7.27 billion.

Although not a hardware stock, Google will figure prominently this week when it reports its second-quarter results Thursday. The Internet search specialist, which is planning an assault on Microsoft ( MSFT) with its Chrome OS operating system, is looking attractive, according to Jefferies & Company.

The analyst firm raised its Google price target from $442 to $465 Monday, citing strength in the paid clicks market.

The analyst firm also raised its Google second-quarter sales estimate from $3.9 billion to $3.98 billion.

"Resilience in paid clicks, some signs of stability in Cost-Per-Click trends and continued focus on margin protection should help Google deliver in-line or slightly better 2Q results," wrote Youssef Squali, an analyst at Jefferies & Company, in a note released Monday

Wall Street expects the firm to post earnings of $5.06 a share and sales of $4.05 billion, according to Thomson Reuters.

Another notable stock this week is Dell, which holds its annual investor event Tuesday in Austin, Texas. Investors will look to the firm for any new insight into the PC market's health.

"We do not expect Dell's analyst day to have a big near-term impact on the stock, as the company is unlikely to comment on current sales trends or provide a target business model," wrote Goldman Sachs analyst David Bailey, in a note released Monday. "That said, additional detail around upcoming cost cuts ($3B beyond the initial $1B+ to date) should bring Dell's significant operating leverage into focus -- we estimate 8% EPS upside for every 1% upside in revenue."

The analyst also encouraged investors to build positions in Dell ahead of a fourth-quarter sales upswing and 2010 corporate hardware upgrades.

Bailey is not the only analyst expecting better things from Dell. Credit Suisse recently upgraded its Dell target from $14 to $16, citing increased confidence in the network storage market and the likelihood of an improved second half.

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