Intel Corp. (NASDAQ: INTC ) today reported second quarter results that surpassed Wall Street's already high expectations.

Net income increased to $1.28 billion, or 22 cents a share, from $885 million, or 15 cents, a year earlier while revenue advanced 8.4 percent to $8.68 billion, the Santa Clara, Calif.-based company said in a press release. Analysts had expected the company to earn 19 cents on revenue of $8,54 billion. Shares of the world's largest chipmaker at first rose in after hours but later sold off because of concerns about the gross margins.

Intel said gross margins were 46.9 percent, below the 48 percent it had targetted. That is a key metric that investors watch, so that's why the shares are off about 4 percent. Maybe they will rebound after this evenings earnings conference call.

Nonetheless, investors expect better things to come as Intel continues to gain market share at the expense of Advanced Micro Devices Inc. (NASDAQ: AMD) and benefits from rising IT spending outside the U.S.

"Revenue is going to ramp up dramatically in the second half of the year,'' said Graham Tanaka, president of Tanaka Capital Management in New York, in an interview with Bloomberg News. ``Investors are seeing in the end market that there is a firming in demand and that they're gaining market share.''

The company also gave bullish guidance. It sees third quarter revenue of between $9 billion and $9.6 billion with gross margins of about 52 percent. Analysts had expected revenue of $9.36 billion, according to Thomson Financial.

International Business Machines Corp. (NYSE:IBM) has weathered the storm about the SEC investigation into its first-quarter earnings disclosure pretty well. Shares of Big Blue have jumped 32 percent over the last six months, keeping pace with other tech heavyweights such as Microsoft Corp. (NASDAQ:MSFT) (up 38 percent) and Hewlett-Packard Co. (NASDAQ:HPQ) (up 38 percent).

Bloomberg News reports The company said last January that it was facing a formal SEC investigation, which makes the stock performance all that more remarkable. Still, you can bet that the earnings call following the release of earnings on January 18 will be lively. I'm sure analysts will be interested to hear the company's thoughts on technology spending and any update on the investigation.

Wall Street is skeptical that IBM shares will go much higher. Their average target price is $99.67,about where the shares are trading today. Analysts are expecting the Armonk, NY-based company to have earnings of $2.19 on revenue of $25.66 billion, according to Thomson Financial.

IBM is a bellwether for both the tech sector and overall confidence in the economy. Since becoming the head of IBM in January 2003, Sam Palmisano wisely decided that IBM should focus on businesses. He got rid of the underperforming notebook computer division and acquired the consulting business of PricewaterhouseCoopers LLC. Some critics of the company have claimed -- wrongly I think -- that IBM makes its hardware and software hard to use so that customers need to hire an IBM consultant to help them out.

Also check out some other earnings reports that we're following, and let us know your thoughts on earnings expectations.