Three months ago, Intel (Nasdaq: INTC ) shocked the Street by showing that there's life left in the PC market. Earnings and sales topped analyst estimates in the fourth quarter, and the stodgy stock jumped 2% on the news.
The chip giant is back with a first-quarter update on Tuesday night. Shares have gained another 7.5% since the last report. Will this quarter send Intel investors even higher, or is the stock due for a pullback?
Analysts don't expect any Herculean feats out of Intel this time. Earnings are seen falling 11% year-over-year to $0.50 per share on flat sales of $12.8 billion. That revenue forecast is in line with management guidance. Intel projects an extra-soft first quarter because the shortage of hard drives should continue to put pressure on the PC market in this period.
Recent industry news points to better numbers, though. Shares of Hewlett-Packard (NYSE: HPQ ) rose as much as 6% on Thursday as two independent reports agreed that the PC market grew 2% in the first quarter. The news also boosted Intel shares by nearly 2%, and Advanced Micro Devices (NYSE: AMD ) notched a 4% gain. It's unclear exactly why AMD would benefit more than Intel from a resurgent PC market, though the smaller competitor always hopes to grab market shares from Intel's order ledgers. AMD reports later next week, so add the stock to your Foolish watchlist and stay tuned for further details.
I smell a Street-beating performance from Intel in that market update.
Looking ahead, Intel's fortunes in the back half of 2012 will depend on two soon-to-be-released products: the Romney server platform and the Ivy Bridge processor for ultralight laptops and Ultrabooks. Keep a close eye on how Intel plans to market these new products for clues on where this stock chart will go next.
Many Foolish writers and analysts love Intel at these prices. Read up on the many reasons why: