Intel Corp shares rose 4.3 percent on Wednesday as its better-than-expected quarterly report helped boost other microchip shares, even as fellow technology heavyweight International Business Machines Corp posted lower hardware sales.

The Philadelphia semiconductor index was up 2 percent in early trade and the Nasdaq was up 1 percent, also helped by solid earnings from Yahoo Inc, whose shares rose 7.9 percent.

But IBM shares fell 2.5 percent after the company said on its earnings call that weaker sales to U.S. financial services customers cost it a percentage point of growth in the third quarter. IBM said that hurt sales of hardware and software, but that the problem did not affect its broader customer base.

Cowen & Co. said IBM's shares could stagnate over the next six to 12 months after rising almost 20 percent over the last six months. The brokerage has a neutral rating on IBM.

Intel, the world's largest chip maker, posted a 43 percent rise in third-quarter profit on strong sales of microprocessors for notebook computers and it gave a better-than-expected revenue forecast for the fourth quarter.

The report prompted a slew of brokerages to increase their share price targets on Intel, including Goldman Sachs and Lehman Brothers.

Although the market has been concerned about the cycle starting to overheat, we believe Intel's cycle is far from over, Goldman said in a note to investors. It has a buy recommendation on the stock with a target of $30.

Intel shares were up $1.11 to $26.59, Yahoo shares were up $2.12 to $28.81 while IBM shares were down $3.01 to $116.59.