NEW YORK (CNN/Money) - Texas Instruments Inc. raised its fourth-quarter sales and earnings forecast Monday, giving investors yet more evidence that the quarter should be incredibly strong for major technology companies.

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TI, the world's biggest maker of chips for cell phones, said it expects earnings to be between 25 cents and 27 cents a share for the quarter, including a 7-cent-a-share gain from its previously announced sale of shares of memory chip maker Micron Technology.

Backing out that gain, the expected earnings range of 18 to 20 cents a share is above the 14 to 19 cents the company gave when it reported its third-quarter results in October. Analysts were expecting earnings of 17 cents excluding one-time items, according to First Call.

The company also boosted its fourth-quarter sales forecast to a range of $2.64 billion to $2.75 billion, from $2.49 billion to $2.7 billion. Wall Street's consensus estimate was $2.6 billion.

Shares of Texas Instruments (TXN: down $0.12 to $28.24, Research, Estimates) jumped 1.6 percent in after-hours trading, according to Instinet, after edging lower in regular trading on the New York Stock Exchange Monday.

The fact that TI raised the high end of its guidance for both sales and earnings is significant, said Ren Zamora, an analyst with Loop Capital Markets. By way of comparison, Intel (INTC: down $0.46 to $31.64, Research, Estimates), the world's biggest chipmaker, did not boost the top end of its fourth-quarter sales range last week and the stock got punished as a result.

"Everybody has been really anxious for really good numbers. Intel stuck with the high end of the range and people were like, 'So what?' " Zamora said. "Investors wanted TI to exceed the high end of its previous range and they did."

Zamora said TI's diversity -- it makes analog and digital chips for PCs, cell phones, digital cameras and other devices, as well as sensors, controls and high-end calculators -- was a key reason why the company was able to boost its guidance so significantly. Intel, on the other hand, is more wedded to the personal computer market.

TI's Ron Slaymaker, vice president of investor relations, said that while the company was benefiting from increased sales of higher-end cell phones, this was not the only reason for TI's strength.

"Wireless is a significant part of the upside but other product lines are providing better than expected growth as well," Slaymaker told analysts on a conference call.

Still, investors are most interested in the cell phone business. Wireless chipmaker Qualcomm (QCOM: down $0.26 to $49.22, Research, Estimates) raised earnings and sales guidance for its latest quarter last week, and said it was seeing stronger-than-expected demand for chips used in cell phones with built-in cameras and color screens.

Recognizing Qualcomm's strength, TI said last week it was partnering with chip company STMicroelectronics (STM: Research, Estimates) to make chipsets that will run on the code division multiple access standard (CDMA) to compete directly against Qualcomm, which also makes chipsets on that wireless platform. TI already makes chipsets for phones running on the competing global system for mobile communications (GSM) platform.

But will TI's good news be enough to lift its stock, as well as the shares of other chip companies?

Intel's numbers were not exactly bad and they failed to boost tech stocks. And even though TI's guidance was better than expected, David Wu, an analyst with Wedbush Morgan Securities, said the new midpoints of 19 cents a share for earnings and $2.7 billion in sales simply met his raised expectations for the company.

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"Business is getting better across the whole semiconductor industry and if you have a strong position, this is a time when you shine. TI has really good products," Wu said.

Optimism has been building about a recovery in the semiconductor sector and TI has already been a big beneficiary: its shares are up about 90 percent this year. So Wu said it would not be a surprise if the stock dripped between now and the end of the year.

"Some fund managers that own the stock are in profit-taking mode. That's what investors are fighting. It has nothing to do with TI doing well or not doing well," said Wu.

Wu does like TI's long-term prospects and valuation, however. The stock is somewhat expensive, trading at 34 times the consensus 2004 earnings estimate of 84 cents a share. But Wu thinks TI could earn as much as $1.20 next year. Based on that, the stock is trading at a more reasonable multiple of 23.5.

Analysts quoted in this story do not own shares of Texas Instruments and their firms have no investment banking relationships with the company.