Strong profits statements from Intel and Yahoo have helped to dispel the clouds gathered over the technology sector by the weak earnings reports unveiled by IBM and Samsung last week.
Shares in Intel rose by 3.6 per cent in after-hours trading in New York after the company, the world’s largest chipmaker, revealed a 25 per cent rise to $2.2 billion in profits for the first three months of this year.
Stock in Yahoo, the Internet media company, surged by 5 per cent after it revealed a doubling in profits to $205 million for the quarter.
The results sent shares in other technology companies higher, with eBay gaining 2 per cent and Google more than 4 per cent after a day which had already proved strong for the sector. The tech-weighted Nasdaq index had closed last night up more than 1 per cent at 1,932.
Technology stocks sustained steep losses last week on disappointing data from sector leaders including IBM, which warned of a failure to close deals and of the impact of slow economic growth in key European markets.
Andy Bryant, the Intel chief financial officer, said: "We still see pretty solid demand around the world. I can’t yet say that I see the signs of weakness that IBM saw."
Intel’s revenues for the quarter were, at $9.4 billion, 17 per cent higher than a year before, helped by strong demand for its Centrino chips, which are used in laptop computers.
The company also raised its margin estimate for 2005 by 1 point to 59 per cent and raised by $500 million its factory investment budget.
Apjit Walia, the RBC Capital Markets analyst, said: "This should put a lot of bears to rest."
Yahoo’s profits rose on revenues up 55 per cent to $1.17 billion, helped the surge in online advertising.
Terry Semel, the company’s chairman and chief executive, said: "Yahoo entered 2005 on a high note."
He added: "We are on the cusp of witnessing a significant increase in engagement of consumers on the Internet and believe we are best positioned to capitalise on the many opportunities to which we are exposed."
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