Technology titans are starting to see a pick-up in spending, which could propel their share prices even further in the coming months.

A number of technology bellwethers are starting to find their footing, from networking giant Cisco Systems Inc. (CSCO) to computer maker Dell Inc. (DELL). Most recently, Intel Corp. (INTC) lifted its third-quarter revenue estimates on surprisingly strong demand. The need for upgrades in the coming months is seen as another catalyst for spending. Taken together, they paint the picture of a stabilizing environment, which should give comfort to investors.

"We're in for sustained improvement in their stock prices," said Trip Chowdhry, an analyst for Global Equities Research. "We're in for more comfort."

Tech shares have already been on a tear for the year but more recently have lagged the broader market. Since the beginning of August, the Standard & Poor's 500 index is up 5%, while the Nasdaq Composite Index is up 3%.

Over the past five months, however, the Nasdaq has surged 61%, while the S&P index advanced 51%.

"We've been pretty surprised at how resilient companies have been," said Carl Howe, an analyst at research firm Yankee Group. He noted the strength was driven on the continued need for wireless and Internet spending despite the downturn.

A major boost in the coming months will be the push to upgrade to the next version of Microsoft Corp.'s (MSFT) Windows operating system. The need to change up the software will require corresponding hardware upgrades, benefiting a number of tech companies.

Earlier Friday, Intel raised its third-quarter revenue forecast to $9 billion, plus or minus $200 million, compared with its prior projected range of $8.1 billion to $8.9 million. Late Thursday, Dell executives expressed optimism about renewed spending, echoing earlier comments from Hewlett-Packard Co. (HPQ) and Cisco.

Intel rose 4.8% to $20.40 in recent trading; Dell rose 4.3% to $16.35; Microsoft rose 1.6% to $25.07; and Cisco rose 1.1% to $22.13. Shares of Intel rival Advanced Micro Devices Inc. (AMD) gained 5.2%, while analog chip maker Texas Instruments Inc. (TXN) rose 2.2%.

Microsoft stands to benefit since more companies will be upgrading to Windows 7 versus those that held off moving to the troubled Windows Vista operating system. Because many companies skipped the last upgrade, their equipment is due for an overhaul, Chowdhry said, adding he believes business spending will drive the tech companies.

The need for equipment upgrades will also greatly benefit Intel, which will also likely see an upgrade cycle driven by sales of Apple Inc. (AAPL) computers using its chips. While PC makers will see a boost, they're still bogged down by a number of cheaper competitors.

Other technology companies that will see a relatively strong lift are Arm Holdings Plc (ARMH), which will benefit from increasing demand in so-called smartbooks, Sybase Inc. (SY), which is tied into mobile messaging services and programs in the business world, and VMWare Inc. (VMW), which is the main driver of the move to virtualized data centers.

Apple, meanwhile, will see gains on both the computer and mobile side. The company's new operating system, dubbed Snow Leopard, will require hardware upgrades. It also recently struck a deal with China Unicom Ltd. (CHU) to bring its iPhone to China, tapping into a huge new market.

Apple shares rose 0.5% to $170.33; Arm rose 2% to $6.48; Sybase slipped 0.3% to $35.04; and VMWare rose 2.5% to $35.86.

-By Roger Cheng, Dow Jones Newswires; 212-416-2153; roger.cheng@dowjones.com