Intel on Tuesday got things off to a good start for the week, reporting what it called its "." The company said income for the quarter ended March 27 skyrocketed 288 percent from the year-earlier period, to US$2.4 billion, while revenue increased 44 percent to $10.3 billion. Both microprocessor and chipset sales increased, with higher average sales prices on Core i3, i5 and i7 processors helping margins.
It would have been hard not to beat last year's first quarter, since that period marked the trough of the recession for components. However, for Intel to have had its best first quarter on record beat everyone's expectations and fed into a rising tide of optimism that is sweeping the tech industry.
Intel rival AMD on Thursday also reported having its best-ever first quarter for revenue. Revenue rose to $1.57 billion from $1.18 billion a year earlier, helping the company get back on the trail to profit. Earnings excluding one-time charges totaled $257 million, compared to a loss of $416 million for the same period in 2009.
While the focus of tech financial news lately has been on the hardware and component sectors, Internet superstar Google on Thursday joined the party. It reported that revenue for the first quarter was $6.77 billion, up 23 percent compared to the year-earlier period, while net income was $1.96 billion, compared to $1.42 billion in 2009. for both its core and newer businesses going forward.
In addition to the earnings announcements, a flurry of forecasts and market reports are helping to shore up the rising sense of confidence.
Last week, , raising their expectations for the year.
"A tech recovery has started in the U.S. and around the world," said Andrew Bartels, vice president and principal analyst at Forrester, in a .
"I now expect the U.S. IT market to grow by 8.4 percent, a bit higher than my earlier forecast, because of better-than-expected performance in communications equipment."
U.S. spending on information and communications technology products and services will hit $741 billion this year, Bartels said. His forecast for the global IT market, in U.S. dollars, is for growth of 7.7 percent.
On its part, Gartner forecast worldwide IT spending to grow by 5.3 percent and hit $3.4 trillion this year.
Helping to confirm the forecasts this week, Gartner and IDC issued upbeat hardware sector data for the first quarter. compared to the first quarter last year. Meanwhile, Gartner reported that the PC market jumped 27.4 percent, exceeding its prior expectations for 22 percent growth.
Better yet, the rise in PC sales is not just due only to pent-up demand from the recession, according to some analysts. "While part of this growth is a correction from a dismal 1Q09, some of it was driven by new PC refresh projects in the commercial markets," said Loren Loverde, vice president of IDC Worldwide Trackers, in the IDC report.
All the good news this week helped push up the tech-heavy Nasdaq to the 2500 mark, which it had not seen since June 2008, several months before Lehman Brothers went bankrupt and Wall Street collapsed, sending credit markets into a tailspin and causing IT users to postpone purchases.
The Nasdaq closed at 2504 Wednesday, rising again to close at 2515 Thursday. Nasdaq computer stocks are up by 7.94 percent since the beginning of the year, while the exchange's telecom shares are up by 7.96 percent.
The rising confidence in IT has also helped companies that won't be reporting until next month. For example, Hewlett-Packard shares hit a 52-week high of $54.64 on Wednesday.
There are some economic clouds darkening the picture a bit. Various reports this week showed that both initial jobless claims and mortgage foreclosure rates jumped in the U.S. recently. If leading tech vendors continue reporting record quarters, however, any clouds may well be ignored by increasingly confident investors.