Intel Points Way to Tech Recovery
SANTA CLARA, Calif. (
) -- It's official. The tech recovery is well underway, if
Intel's
(INTC) - Get Intel Corporation Report
impressive first-quarter results
are anything to go by.
As a key barometer for the tech sector,
are always closely monitored by investors, and last night's results bode well for PC and server stocks entering earnings season.
|
"Expect the PC vertical stocks to better reflect the strength we have been talking about throughout the quarter," wrote Avi Cohen, an analyst at Avian Securities, in a note released on Thursday. Intel's first-quarter numbers and strong guidance highlight upside for companies such as
Microsoft
(MSFT) - Get Microsoft Corporation Report
and chip specialist
Marvell
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(MRVL) - Get Marvell Technology, Inc. Report
, he added.
Right on cue, Microsoft shares climbed 1.67% shortly after market open, outpacing the Nasdaq's modest advance of 0.61%.
While
improving PC and server sales
clearly spell good news for Microsoft, it is worth noting, however, that there could be a delay before the software giant actually recognizes revenue from its OEM partners.
Intel's results were also a shot in the arm for a slew of other tech stocks on Thursday, with rival
AMD
(AMD) - Get Advanced Micro Devices, Inc. Report
climbing 3.24% shortly after market open and computer maker
Dell
(DELL) - Get Dell Technologies Inc Class C Report
gaining 3.07%.
which has struggled through the recession, reports its own first-quarter results after market close on Thursday. Analysts surveyed by Thomson Reuters expect AMD to post a loss of 8 cents a share and revenue of $1.53 billion.
Intel, however, is clearly in prime position for the tech spending rebound.
"Early signs point to second half upside on corporate PC replacement," wrote Bobby Burleson, an analyst at Canaccord Adams, in a note released Wednesday. "We believe rush orders from notebook customers bake in another beat in Q2."
>> Who Owns Intel?: Ken Fisher
Burleson, who raised his Intel price target from $27 to $30, explained that PC sales and the push towards 32-nanometer chips are driving Intel's growth.
At least one analyst, however, urged investors to approach Intel with some caution.
"With the PC supply chain now fully recovered, we believe Intel will face headwinds due to slowing desktop PC growth
and ASP pressures from a continued mix-shift to the low-end in laptops," wrote Adam Benjamin, an analyst at Jefferies & Company, in a note. Additionally, Intel's stock already reflects investors expectations for an enterprise upgrade cycle, he added.
Benjamin nonetheless raised his Intel price target from $17 to $19 and reiterated his underperform rating for the company.
Intel shares rose 74 cents, or 3.25% to $23.51 on Wednesday.
-- Reported by James Rogers in New York
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