AMD (AMD) and IBM (IBM): Tech still has a pulse

There has been plenty of concern that tech will be hit as hard as any industry in the recession. Intel (NASDAQ: INTC) posted fine results but has poor guidance. That pushed many technology shares down. Over the last two weeks shares in big companies in the sector have sold off as much as financials.

The sector showed it still has a pulse yesterday. AMD (NYSE: AMD), which has done almost nothing right over the last three years, nearly broke even on rising revenue. Its shares were up over 12% after hours. Revenue rose to $1.82 billion from $1.39 billion. For the third quarter AMD's net loss came to $67 million, or $.11 compared with a loss in the year-earlier period of $396 million, or $.71. The company even said its troubled graphics chip business did well.

Since AMD has about 20% of the server and PC chips market and said its earnings would be flat in the fourth quarter, that demand has to be coming from somewhere. Business buying of computers cannot be entirely dead. At least that is the AMD message.

Even more impressive were results from IBM (NYSE: IBM) which indicated that a great deal of tech spending is robust and that emerging markets still have some gas in their tanks. The huge computer and software firm said that third quarter net income rose to $2.8 billion, or $2.05 per share, from $2.4 billion, or $1.68 per share, a year earlier. Revenue rose 5 percent to $25.3 billion. And, the company's management indicated there were better days ahead.

IBM's CFO said that "the software division has a healthy pipeline of business prospects that should enable it to keep business growing even given the current weak economy," according to Reuters. Based on IBM's size, it should be a reasonable proxy for the tech industry all on its own.

There may be a recession in progress but tech is showing that it will not go down without a fight.

Douglas A. McIntyre is an editor at 247wallst.com.