NEW YORK (
) -- The chip sector is raising expectations of a
tech spending rebound
, thanks to a flurry of upbeat news from
Intel raised its third-quarter revenue guidance Friday before market open, predicting sales between $8.8 billion and $9.2 billion, compared to its previous projection of $8.1 billion to $8.9 billion.
Intel's strong guidance came less than 24 hours after PC giant Dell posted better-than-expected second-quarter
Both Intel and Dell shares basked in the warm afterglow of their announcements, climbing 3.95% and 7.45%, respectively, in early trading Friday. The tech giants, however, were not the only companies enjoying a wave of investor confidence.
The Commerce Department said this week that U.S. consumer spending rose 0.2% in July, likely boosted by the government's Cash-for-Clunkers program, and further fueling talk of a recovery.
Marvell shares surged after the chipmaker blew past analysts' estimates in its
Thursday, despite a profit plunge.
The Santa Clara, Calif.-based firm is reaping the benefits of a healthier spending climate, pushing its shares up $1.18, or 8.07%, to $15.81.
"We experienced improving momentum throughout the quarter," said Marvell CEO Sehat Sutardja during a conference call late Thursday. "We're encouraged by the amount of order stabilization."
The silicon specialist also grew its sales 23% sequentially, fueling talk of a recovery, and expects revenue from new products to double during the third quarter. Further reflecting its confidence, Marvell issued bullish guidance, predicting third-quarter revenue between $680 million and $730 million, well above analysts' estimate of $647.05 million.
Marvell is back on the bandwagon after great numbers and great guidance," wrote Avi Cohen, managing partner at Avian Securities, in a note released Friday. "
There is lots of room for upside next year."
Marvell, which competes with
, highlighted mobile and wireless as key growth drivers during its conference call Thursday.
Revenue in this sector was up about 20% sequentially and accounted for around 20% of Marvell's total second-quarter sales, according to Sutardja. This is expected to grow by at least another 20% in the third quarter, he added.
At least one analyst, however, urged investors to approach Marvell with caution.
"We continue to recommend investors remain on the sidelines despitethe near-term resumption in orders in the hard disk drive and handset supplychains," wrote Adam Benjamin, an analyst at Jefferies & Company, in a note released Friday.
Despite Marvell's sequential second-quarter growth, Benjamin warned that the company is still not out of the woods. "
We would look to become more positive upon indications of more sustainable growth drivers post the recovery," he added, but raised his Marvell price target from $14 to $16.