Chipmaker Intel forecast third-quarter profit above Wall Street expectations on Thursday as a slump in the PC market started to ease, sending its shares up 8% in extended trading.

The market for personal computers has tumbled over the past year, with inventory piling up because consumers had already purchased the machines needed during the pandemic.

But the glut has started to ease as PC shipments fell only 11.5% in the June quarter compared to 30% slump in each of the previous two quarters, according to Canalys data.

Sequentially, they rose 11.9%, signaling that vendors' appetite for fresh stock will rebound in the second half of the year.

Cloud majors Microsoft and Alphabet expect to ramp up spending on data centers. While the bulk of that benefit will go to companies like Nvidia that make chips for artificial intelligence, the trend could provide some benefit to the chip industry.

The company forecast adjusted current-quarter earnings per share of 20 cents. Analysts polled by Refinitiv were expecting earnings of 16 cents.

The company forecast adjusted current-quarter revenue to roughly be between $12.9 billion and $13.9 billion, compared to estimates of $13.23 billion.

  - Reuters