Intel (INTC.O) rose nearly 8% on Friday and sparked a jump in chip stocks after its upbeat forecast signaled that the personal computer market was rebounding from its quarters-long slump.
“(Intel) does appear to have turned the corner on the worst of it”, Bernstein analysts said, pointing to the improvements in the PC-focused business and customers it had signed for its chip contract manufacturing business, among others.
Intel forecast fourth-quarter revenue and margins above Wall Street estimates on Thursday, after it reported a smaller-than-feared decline in the segment that houses its PC business for the July-September period.
Under CEO Pat Gelsinger, Intel is trying to turn around its business by making heavy infrastructure investments that the company hopes will give it an edge in chipmaking and allow it to compete with the likes of Taiwan’s TSMC (2330.TW) for foundry clients.
After securing three unnamed clients for the contract manufacturing unit, Gelsinger told Reuters on Thursday that he expects to close a deal for a fourth customer before the end of the year.
“The foundry business is slowing taking shape. The announcement of new customers is a clear positive that shows there is customer interest in what Intel brings to the table,” Logan Purk, analyst at Edward Jones, said.