Shares of Intel Corp rose 4 percent on Wednesday after analysts raised their price targets for the stock following a quarterly earnings report and revenue forecast that blew past expectations, giving investors hope of a tech sector recovery.

Intel shares were up 88 cents at $21.37 in premarket trade on Nasdaq after the news, which also led some to assume that rival chip makers and personal computer makers would benefit.

UBS raised its price target for Intel shares to $27 from $24 after the report while Lazard upped its price target to $26 from $24.

Intel is benefiting from strong demand for retail notebooks and Nehalem servers. With better control of costs and prices, we see a structural improvement in Intel's margin profile, Needham & Co analyst Edwin Mok said in a research note in which he announced a price target increase to $28.

Netbooks are mini laptops that are popular among consumers and Nehalem is an Intel chip for server computers.

Computer maker Dell Inc saw its shares rise more than 2 percent after Intel forecast fourth-quarter revenue of $10.1 billion well above Wall Street expectations for $9.5 billion. Microsoft Corp shares were up 1.5 percent.

Looking beyond the fourth quarter Mok said that technology investors could look forward to a computer sales boost after Microsoft releases its upcoming Windows 7 computer operating system on October 22.

Beyond the near-term, we believe Windows 7 will drive a much-needed corporate refresh in 2010, leading to further revenue growth and substantially higher earnings, Mok said.

FBR Capital Markets analyst Craig Berger said Intel's fourth-quarter revenue guidance is back to levels achieved ... before the credit driven financial meltdown.

Berger said Intel's biggest rival, Advanced Micro Devices , could also see its shares rise on the strength of Intel's outlook.

(Reporting by Sinead Carew, editing by Dave Zimmerman)