What happened

Shares of Intel (NASDAQ:INTC) have risen today, up by 5% as of 12:15 p.m. EDT, after a Wall Street analyst increased estimates for the chipmaker. Jefferies' Mark Lipacis boosted his price target on the stock from $53 to $62 while reiterating a hold rating.

So what

Lipacis believes that Intel's data center business is enjoying strong demand from hyperscale customers. With the novel coronavirus pandemic causing many people to work from home, demand for data center components that power the cloud is booming. Data center leasing volumes are also high, which should also contribute to better-than-expected sales of data center chips in the first quarter.

Intel chips

Image source: Intel.

Lipacis is modeling for data center group revenue to increase 7% on a sequential basis in the first quarter. That segment generated $7.2 billion in revenue in Q4.

Now what

The analyst expects Intel to beat its first-quarter outlook, which calls for $19 billion in sales. While many tech companies have been updating or withdrawing guidance altogether, Intel did not change its forecast. The company's outlook also calls for adjusted earnings per share of $1.30.

The company suspended its share repurchase program last month in an effort to conserve cash while remaining committed to its dividend payments. Intel reports Q1 results tomorrow, and investors will want to know how the COVID-19 crisis is impacting its various segments. In a recent prospectus, the company warned that COVID-19 could hurt the business, particularly if it causes a broad economic slowdown.