Intel said sales in the current quarter have been better than expected across its product line and that its factories struggled to keep up with demand.
In a scheduled update, Intel targeted sales in a range of $9.2 billion to $9.4 billion, improved from a previous forecast range of $8.8 billion to $9.4 billion.
The company also raised its expectations for profitability for the first quarter, which ends April 2nd, citing lower manufacturing costs.
Shares of the technology bellwether rose 1.4 per cent following the update, which also lifted shares of other chip makers and producers of semiconductor manufacturing equipment.
Intel's stock had already risen 6 per cent this year in expectation of a strong first quarter.
Intel supplies more than 80 per cent of the world's personal computer microprocessors - the central chip in PCs - and has been gaining market share in notebook PCs, the fastest-growing segment of the market, against rival Advanced Micro Devices.
In January, the company had targeted first-quarter sales of $8.8 billion to $9.4 billion with a gross profit margin of 55 per cent.