Intel Corp beat earnings expectations for the first quarter and raised its full-year revenue and profit forecasts on Thursday, driven by higher demand for chips from data centers and personal computers.
Shares of the Santa Clara, California-based chipmaker rose 8 percent to $57.29 in after-market trading after the chipmaker said it expects full-year revenue of $67.5 billion, up $2.5 billion from its prior guidance.
Intel has been focused on transforming itself from a supplier of personal computers to a maker of chips for growing data center business and newer areas such as driverless cars and artificial intelligence. That shift appeared to be taking hold as revenues for Intel’s data center business accounted for almost half of the company’s revenue in the first quarter, the highest proportion ever.
Intel said fresh demand for applications such as artificial intelligence fueled the data center business.
“The strength of Intel’s business underscores my confidence in our strategy and the unrelenting demand for compute performance fueled by the growth of data,” Intel CEO Brian Krzanich said in a statement.
The better-than-expected results and brighter forecast pushed shares to their highest in at least five years. The data center results also suggest the chipmaker’s large customers have not been deterred by two chip flaws that emerged earlier this year.
Revenue at Intel’s client computing, which supplies chips to PC makers and is the biggest contributor to sales, rose 3 percent to $8.2 billion, beating estimates of $7.91 billion, according to Reuters.
Revenue from the data center business, seen as key to its shift from PC supplier, recorded its biggest gain of 24 percent to $5.2 billion, beating estimates of $4.73 billion.
The company’s net income rose to $4.45 billion, or 93 cents per share, in the quarter ended March 31, from $2.96 billion, or 61 cents per share, a year earlier.
Net revenue rose to $16.07 billion from $14.80 billion.
Excluding items, the chipmaker earned 87 cents per share.
Analysts on average were expecting Intel to report a profit of 72 cents per share on a revenue of $15.08 billion, according to Reuters.