The stock price of Intel Corporation (NASDAQ:INTC) climbed more than 5% to $29.40 per share during the extended hours trading after the chipmaker raised its outlook for the second quarter and the fiscal year citing the reason that the demand for personal computers (PCs) used by businesses is stronger than anticipated.

Second quarter outlook

Intel Corporation (NASDAQ:INTC) now expects to generate $13.7 billion in revenue (plus or minus $300 million). The chipmaker previously estimated to achieve $13 billion in revenue (plus or minus $500 million) for the second quarter.

The company also forecasted its gross margin to increase by one point to 64% (plus or minus 2%), which primarily driven by higher PC unit volume. R&D and MG&A expenditures will be approximately $4.9 billion, higher than its previous estimate of around $4.8 billion. Intel Corporation (NASDAQ:INTC) said its second quarter tax rate is expected to be around 28%.

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Full year outlook

For the fiscal year, Intel Corporation (NASDAQ:INTC) said it is now anticipating some growth in revenue compared with its previous expectation of approximately flat revenue. The chipmaker expects its gross margin for the entire year to be in the upper half of the previous range of 61% (plus or minus a few percentage points) due to anticipated improvements in unit cost and volume.

In terms of R&D plus MG&A spending, the company estimated around $19.2 billion (plus or minus $200 million) compared with its previous forecast of $18.9 billion (plus or minus $200 million) for the year. Its tax rate is expected at about 28%.

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Some analysts suggest that the demand for business PCs increased after Microsoft Corporation (NASDAQ:MSFT) decided to end its support for the Windows XP operating system. Bernstein analyst Stacy Rasgon noted, “PCs have been getting less bad for a while, but if it’s all business PCs then the question is going to be sustainability.”

Last month, Intel Corporation (NASDAQ:INTC) and Google INc (NASDAQ:GOOG) (NASDAQ:GOOGL) unveiled a variety of highly-competitive Chromebooks from hardware manufacturers including Acer Incorporated (TPE:2353), ASUSTEK Computer Inc. (TPE:2357), Lenovo Group Limited (ADR)(OTCMKTS:LNVGY), and Toshiba Corp (TYO:6502) among others. The devices were powered by the search engine giant’s Chrome operating system and integrated with Intel Bay Trail-M system-on-chip (SoC).

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