Intel raised its third-quarter revenue forecast and said global demand for computing products was stronger than expected, sending its shares up sharply.
The news helped the stock market open higher, setting the stage for the chip sector to help the market shake off last week's losses.
Shares of Rival Advanced Micro Devices also climbed.
Intel, the world's biggest chipmaker, said it sees third-quarter revenue between $9.4 billion and $9.8 billion, up from its previous range of $9.0 billion to $9.6 billion.
Analyst had expected revenue to be about $9.38 billion, according to Reuters Estimates.
Intel also said that its gross margin in the period would be in the upper half of the previous range of "52% plus or minus a couple of points."