Updated from 11:11 a.m. to include thoughts from BMO Capital Markets.
NEW YORK (TheStreet) –– Intel (INTC) shares surged in early trading Friday after the world's largest semiconductor company raised its second-quarter revenue outlook and its gross margin outlook, noting higher PC unit volume as the primary cause.
Santa Clara, Calif.-based Intel said that it now expects second-quarter revenue to be $13.7 billion, plus or minus $300 million. That's up from a prior outlook of $13 billion, plus or minus $500 million. The company also boosted its gross margin outlook, a closely watched level for Intel, to 64%, plus or minus a couple of percentage points. That's up from a prior outlook of 63%.
Driving the growth is the rebound in the PC market, particularly as Microsoft (MSFT) has stopped support for Windows XP forcing enterprises to upgrade their systems.
"Intel now expects some revenue growth for the year as compared to the previous outlook of approximately flat," the company said in a press release. "The change in outlook is driven mostly by strong demand for business PCs." Intel noted that it would provide additional commentary when it reports second-quarter earnings on July 15.
Shares of Intel surged in Friday trading, gaining 6.9% to $29.87, after hitting $30.06 intra-day, a new 52-week high.
Intel also noted that R&D plus MG&A spending will be about $4.9 billion, $100 million more than initially expected. The company also noted that its tax rate will now be 28%, as opposed to a prior outlook of 27% "due to higher profits in higher tax jurisdictions."
Following the guidance boost, analysts on Wall Street were largely positive, noting the positive read-through for Intel, as well as the PC industry as a whole. Here's what a few of them had to say: