Intel bucks gloom with upgrade
Amid all the doom and gloom in the financial arena, Intel cops an upgrade. Piper Jaffray has raised its rating on Intel to "buy" from "neutral."
Despite an economic crisis and volatile stock market, Intel copped an upgrade Tuesday.
Shares of the world's largest chipmaker rose 1.46 points, or 8.45 percent, Tuesday to $18.73.
At least some of this uptick can be attributed to investment bank Piper Jaffray, which raised its rating on Intel to "buy" from "neutral" on Tuesday. Piper Jaffray analyst Auguste Richard said in a research note reported widely on Tuesday that Intel should make its third-quarter earnings numbers and that checks show that Intel is running its factories nearly flat out, which should favorably impact gross margin, a key indicator of profitability.
In the third quarter, Intel's gross margins may come close to the midpoint of the gross margin range, on a profit of 35 cents and sales of $10.2 billion, according to Richard. In July, Intel forecast sales of $10 billion to $10.6 billion for the third quarter.
Intel will report third-quarter earnings on October 14.
On another front, Intel Chairman Craig Barrett said the chipmaker will continue to invest aggressively in products and technologies despite the U.S. financial meltdown's potentially negative impact on emerging markets that are needed for its growth, according to a Reuters report.
In 2007, Intel spent $5.8 billion on research and development and $5 billion on plant and equipment.
New products may help Intel's bottom line. Intel isa brand new chip architecture in the fourth quarter. The "Nehalem" line of processors will appear initially as the Core i7 line of desktop silicon.
Intel will follow the desktop chips with Nehalem server products in the first quarter of next year.