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Updated from 12:42 p.m. EDT

Shares of


(INTC) - Get Intel Corporation Report

and other tech heavyweights moved higher after the microprocessor giant hoisted third-quarter revenue and margin guidance, citing strong sales across the board.

Following the announcement -- which came a day after the company's CEO noted signs of improving personal computer sales -- shares of Intel tacked on $1.88, or 7.1%. to $28.27, forging past the 52-week high set yesterday.

The news sparked a surge in other tech issues, with

Advanced Micro Devices

(AMD) - Get Advanced Micro Devices Inc. Report

gaining 62 cents, or 6.6%, to $10.07 and

Texas Instruments

(TXN) - Get Texas Instruments Incorporated Report

adding 91 cents, or 4.1%, to $23.06. Chip-equipment maker

Applied Materials

(AMAT) - Get Applied Materials Inc. Report

was up $1.08, or 5.2%, to $21.81.

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(DELL) - Get Dell Technologies Inc. Class C Report

also gained on the news, up 96 cents, or 3%, to $33.23, nearing its 52-week high of $34.52, though shares of H-P were off 11 cents, or 0.6%, to $19.73.

Intel now expects revenue of between $7.3 billion and $7.8 billion for the quarter, compared with the previous range of $6.9 billion to $7.5 billion. The midpoint of the new guidance implies robust growth of 11% from the prior quarter.

Analysts polled by Thomson First Call are looking for Intel to earn 19 cents a share on revenue of $7.2 billion in the third quarter.

On a follow-up conference call, Chief Financial Officer Andy Bryant noted, "In the last 10 years there have probably been two quarters where we have seen growth above 10%." He said the company has checked channels and hadn't found any evidence of inventory build.

The strength in revenues has shown up in the company's Intel Architecture Group business, which includes microprocessors, chipsets and motherboards. In what Bryant called a "pleasant surprise," he said IAG sales have been "unexpectedly strong across all regions and channels." Demand for Intel's communications products remains soft, however.

Pressed -- as always -- for commentary on whether Intel's snappy news could reflect an economic rebound, Bryant refused to take the bait. Even if such a turn were under way, "We probably wouldn't say it 'til everybody had finished writing about it," he said. But later on the call he added that if the momentum from the beginning of the third quarter can be sustained into the fourth, it likely will show "the economic tide rising a bit."

Due mainly to the spike in revenues, Intel said it now expects a gross margin of 56%, plus or minus a couple of points, vs. the previous expectation of 54%, also plus or minus a couple of points. As is usually the case, Intel didn't provide a specific earnings estimate, though inevitably with revenue and margins trending higher, profits will follow suit.

The margin upside follows a related hike in guidance in July, when Intel told an appreciative Wall Street that its margins for 2003 would be 54%, three full percentage points better than previously forecast.

Quinn Bolton, an analyst at Fahnestock, says the cautious tenor of Bryant's comments comes as no surprise. "Tech companies are going to be very conservative with the timing of when they make their call that they're seeing an IT recovery -- they'll probably wait for six months after it happens," he says. "Everyone is gun-shy and would rather keep low and be

too conservative rather than put out expectations and fail to meet them. We'll probably see pretty good evidence of a recovery before companies acknowledge it in public comments."

Intel is "certainly not cheap at these levels but the outlook is better than expected so the sense is with overall fundamentals getting better there could be some upside in the shares," he adds. Assuming Intel can post peak earnings of $1.25 to $1.30 in 2005 and it trades at a price to earnings multiple of 25, the shares could trade into the low 30s, he says. "But it's probably hard to see it much above that."

He has a neutral rating on shares, mostly given the limited upside; his firm hasn't done banking for Intel.

In other news from the conference call, Bryant said most of the upside change in expectations is due to unit growth; he declined to comment on trends in average selling prices.

In the past week,


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have reported outsized growth in sales of notebooks, but Intel said its growth wasn't limited to laptop chips. "We tend to see stronger mobile growth in mature markets and desktop growth in emerging markets," explained Bryant.

Meanwhile, the ramp of Intel's heavily promoted, Wi-Fi-enabled Centrino silicon is "ramping well, on target with plans," he added.

Bryant also noted that it's still relatively early in the quarter, with only about seven weeks gone in the three-month period. "The real question is, does the momentum in the first half of the quarter sustain itself?" he pointed out on the call. "That's why we still have a pretty sizable

revenue range -- making a call this early in the quarter we do still have a lot of uncertainty."

Intel will host a regular midquarter update on Sept. 4.

Responding to an analyst question about why there has been such upside, Bryant shrugged, "I wish I knew the answer to that question." He said he'd heard anecdotal reports of PC upgrades starting.

To that end, it's worth noting that only last month Bryant said on the company's earnings call, "We're not seeing a big upgrade cycle; we're not seeing IT budgets being raised suddenly." Indeed, many sharp tech thinkers

dispute the notion that there ever was a regular upgrade cycle by which big companies replaced their PCs en masse.

While there's no question PC sales have lately gotten a lift -- a trend noted yesterday by Intel CEO Craig Barrett in public comments -- other reports suggest the spike seems to have come mostly from the more fickle consumer side, with individual buyers snapping up bargains amid a price war between Dell and H-P.

Just last week, research firm Gartner bumped up its third-quarter sales forecast to 9.6% growth from 8%, citing consumer purchases. Dell has likewise said consumers and small businesses have responded to its recent price cuts more eagerly than big companies.

If anything, such sales could get a further boost from Dell's announcement yesterday of

still more prices cuts across the board, including on low-end consumer PC hardware.