Veteran chip maker Intel Corp. not only beat Wall Street estimates for its second quarter, it also raised its guidance for the rest of the year, as it expects to reach profitability in some segments much earlier than it originally predicted.

Intel’s revenue rose 8 percent from a year ago, to $14.8 billion, beating analysts’ prediction of $14.4 billion. Its profit of $3.5 billion, or 72 cents a share, up 21 percent from a year ago, also beat analysts’ forecast of 68 cents.

The company saw growth in several key segments, including memory chips, cloud and the Internet of Things. Like other aging tech companies such as IBM Corp., Intel has started to shift its focus from traditional hardware to the cloud, artificial intelligence and the Internet of Things. During today’s earnings call with analysts, Intel Chief Executive Brian Krzanich (pictured) said that the company is “executing well to our strategy to transform from a PC-centric company to a data-centric company that powers the cloud and billions of smart and connected devices.”

Krzanich said that market conditions and the company’s strong execution have accelerated its path to profitability in various segments. In particular, he revealed that Intel’s NAND memory segment will return to profitability this quarter, beating the company’s previous estimates.

While Intel’s execs highlighted the company’s focus on shifting away from the PC market, Chief Financial Officer Bob Swan also noted that Intel’s PC-centric business performed “extremely well in a declining market,” earning $8.2 billion for the quarter, an increase of 12 percent year-on-year.

Intel faces some stiff competition in the CPU business with Advanced Micro Devices Inc., whose new Ryzen CPUs go head-to-head with Intel’s products at a slightly lower price point. Krzanich said today that he is not worried, insisting that “competition makes us stronger, and we’re ready for it.”

Intel said expects $15.7 billion in revenue earnings per share of 80 cents in the current quarter. For the year, it’s projecting a $3-a-share profit on $61.3 billion in revenue.

Intel’s second-quarter performance surprised many analysts, including Patrick Moorhead, president and principal analyst at Moor Insights & Strategy, who said that Intel is on track for an impressive year. “Intel had a very good Q2. What struck me was the diversity of their revenue and their ability to grow in areas where many doubted they could see a lot of growth or success,” Moorhead told SiliconANGLE. He added that he was particularly surprised by revenues for Intel’s notebook division, which grew by 20 percent.

“The things to factor in the future equation is when Nervana, Optane and MobileEye all get fully online, counterbalanced by some of the competitive impact in AI and general-purpose x86 processors,” Moorhead added. “All in all, this was a very solid quarter and gives indications of some positive things for the future for Intel.”

Intel’s strong performance initially caused the company’s shares to spike by nearly 4 percent in after hours trading, but then they cooled, up a little over a half-point.

Photo: Robert Hof/SiliconANGLE