Several brokerages raised their share price targets for Intel Corp. on Wednesday, betting the leading chip maker would improve after reporting disappointing profit margins for the last quarter.

While investors, concerned about price competition with rival AMD, pushed Intel's shares down more than 4 percent a day after its second-quarter report, analysts said Intel's revenue forecast for the current quarter was conservative.

We believe (Intel) is prudently keeping expectations controlled and recommend any share weakness be used as an opportunity to add positions, said Stifel Nicolaus analyst Cody Acree, who raised his price target for Intel to $31 from $27 based on a 2008 earnings per share estimate of $1.36, up from his previous estimate of $1.33 per share.

Intel forecast on Tuesday its third-quarter revenue at $9 billion to $9.6 billion, compared to analysts' forecasts ranging from $9.1 billion to $9.9 billion, as compiled by Reuters Estimates.

The projection came after Intel reported a 44 percent rise in second-quarter profit though its gross margin was 46.9 percent, short of its target of 48 percent.

We believe the company is delivering on its recovery and restructuring plans that should result in margin and earnings expansion through the next several quarters, Acree said in a note to clients.

Another analyst, John Lau of Jefferies & Co., raised his price target for Intel to $29 from $25, saying the company remains well positioned to regain market share on the back of its new products and its manufacturing prowess.

Intel, which has lost market share to smaller rival Advanced Micro Devices Inc., fought back with a slate of new chips and price cuts on older ones. AMD countered by slashing its prices, and is set to roll out a new processor in August. AMD reports earnings on Thursday.

Michael Masdea of Credit Suisse expects Intel's share price to fall from current levels but said the drop may not be as steep as he had previously expected.

Masdea said Intel's failure to deliver a flawless quarter disappointed investors who had sent its shares up 30 percent this year, including almost 9 percent in the last month alone.

However, with little competitive threat through the turn of the year, it's still Intel's game to lose, Masdea said in a note to clients.

Shares of Intel fell 4.63 percent to $25.11 on Nasdaq.

Intel posted net earnings of $1.3 billion, or 22 cents per share, for the second quarter, compared with $885 million, or 15 cents per share, a year earlier.

Excluding a special gain of 3 cents per share related to a tax item, Intel's profit was 19 cents per share, in line with the average estimate.

Revenue was $8.7 billion, up 8 percent from a year earlier, and higher than the $8.5 billion forecast by Wall Street.