Investing.com – A surge in Advanced Micro Devices and Apple teed up a strong rally across tech stocks as earnings from both companies were not as bad as many had feared.
Chipmaker Advanced Micro Devices (NASDAQ:AMD) posted in line earnings and revenue that narrowly fell short of estimates. Its shares rallied 16%, though some analysts continued to express caution.
Fourth-quarter earnings were $0.08 share, in line with consensus estimates and revenue of $1.42 billion just missed estimates for $1.45 billion.
Investor expectations heading into the report had been dented by Nvidia warning on Tuesday that revenue would miss expectations, owing to slowing revenue in gaming and data center segments.
For the fiscal first quarter, the chipmaker expects revenue in a range of $0.75 billion to $1.25 billion, which would be a 24% year-on-year decline, the company said. That was short of analysts' estimates of $1.47 billion.
Still, some on Wall Street expressed caution on the stock.
"We continue to model for server share gains at the more optimistic end of the company's 4-6 quarter target, and solid continued gains in consumer desktop and notebook, but still think the most likely path is slow growth this year," Morgan Stanley (NYSE:MS) said.
Apple (NASDAQ:AAPL), meanwhile, reported earnings of $4.18 share on $84.3 billion in revenue in the fiscal first quarter, ahead of analysts' estimates for earnings of $4.17 on $84 billion in revenue. Its shares rose 5%.
Total revenue from all other products and services grew 19%, while iPhone sales declined 15%.
The earnings report suggested that iPhone sales may have bottomed and cleared up some investor doubts that had clouded the outlook on the iPhone maker, analysts said.
"Importantly, Apple made investors feel better about several recent debates -- weaker iPhone demand, gross margin risk and services growth deceleration," Morgan Stanley said.
"iPhone sales trends may have bottomed, supplier data points are likely overly negative due to Apple's inventory build, and while iPhone replacement cycles are lengthening globally this headwind appears manageable outside of a few emerging markets facing macro and currency headwinds."