Intel last night beat analysts' estimates for quarterly profit and revenue, driven by its high-margin data centre business and strong demand for its PC chips.
This sent its shares up as much as 6% in extended trading, though those gains later evaporated on concerns about US trade tensions with China.
Intel's 39% rise in profits and better-than-expected fourth-quarter forecast should come as a relief for investors after three days of grim news from other major chipmakers that have shaken stock markets globally.
Amazon and Alphabet also reported disappointing earnings last night, sending technology stocks down in after hours trading.
Intel executives do not see any near-term weakness from the trade tensions or Chinese economy, despite the fact that large data centre customers like Baidu and consumer PC factories are located there.
But Intel's share gains in extended trading diminished to less than 1% when interim chief executive Bob Swan said trade tensions could be a "headwind" in the longer term next year.
Texas Instruments, STMicroelectronics and SK Hynix have all warned of slowing demand for the remainder of the year.
Intel bucked the trend thanks to strong sales of chips for PCs, the second quarter in the row the company benefited from the sector after years of stagnation in that business, and increasing sales of iPhone modem chips.
Swan told Reuters the PC chip strength came from computer purchases by business customers in developed economies as well as gamers building high-end machines.
Many businesses are upgrading their PCs because Microsoft has said it will end support for some older versions of Windows in early 2020.
Also boosting Intel sales this quarter was its business for modems, which connect smart phones to wireless data networks and which jumped 131% in the quarter.
The gain resulted from Intel completely replacing rival modem supplier Qualcomm in the most recent models of Apple products.
But Swan said the modem sales are also pressuring Intel's margins and contributed to the firm lowering its fourth-quarter operating margin outlook to 34.5%.
"That being said, what the modems and memory do for the company is allow us to play in a much larger market," he said.
Intel forecast current-quarter revenue of $19 billion and adjusted earnings of $1.22 per share. Analysts on average were expecting revenue of $18.40 billion and a profit of $1.09 per share, according to Refinitiv data.
Intel has been increasingly catering to a booming data centre market as revenue from PCs has flattened since 2011.
Revenue from its data centre business rose 25.9% to $6.14 billion in the quarter, while analysts were expecting revenue of $5.89 billion, according to financial and data analytics firm FactSet.
Revenue in Intel's client computing business, which caters to PC makers and is still the biggest contributor to sales, also rose 15.5% to $10.23 billion, beating FactSet estimates of $9.33 billion.
Intel's PC sales have trended positive in recent quarters, lifted by stronger demand. Many businesses have started the process of buying new PCs because Microsoft has said it will end support for Windows 7 in early 2020.
The company said its net income rose to $6.40 billion, or $1.38 per share, in the third quarter ended September 29 from $4.52 billion, or 94 cents per share, a year earlier.
Excluding items, the company earned $1.40 per share.
Net revenue rose 18.7% to $19.16 billion.
Analysts on average were expecting adjusted earnings of $1.15 per share and revenue of $18.11 billion.
