Intel beat expectations with its latest quarterly report and its forecast for the current quarter, defying concerns that the growing popularity of tablets and a shaky economy are eating into demand for personal computers.
The world's largest chip maker said revenue in the current quarter would be $14.7 billion, plus or minus $500 million. Analysts' average forecast is $14.23 billion, according to Thomson Reuters.
Intel said developing countries like China are fueling demand and helping make up for slower growth in the United States and Europe.
Shares rose more than 3 percent after the report.(Click here for the latest after-hours quote.)
"Guidance is well above consensus estimates, but below seasonality,'' said Patrick Wang, an analyst at Evercore Partners. "They are giving us a realistic look at the fourth quarter and it seems like they are guiding conservatively," he said.
Earnings excluding items rose to 69cents per share in the third quarter from 52 cents per share a year ago.
Net income rose 24 percent to $3.7 billion.
Revenue rose 29 percent to $14.3 billion from $11.10 billion a year ago.
Analysts had expected the company to report earnings of 61 cents on revenue of $13.87 billion, according to Thomson Reuters.
Intel's processors are used in 80 percent of the world's PCs but the company has failed to gain traction in increasingly popular mobile gadgets like Apple's iPad and Google's Android smartphones.
Corporate technology spending has held up in recent quarters despite increasing economic uncertainty, helping sales of Intel's high-margin server chips. Tech companies such as Facebook are also investing heavily to build out the massive data centers.
Data center sales for the world's leading chipmaker rose 15 percent in the quarter. By comparison, sales of Intel's Atom mobile chips plummeted 32 percent.
"We have all these data centers out there being built, the companies aren't buying traditional servers from Dell or HP, but they are buying the chips and making their own servers," said Kevin Cassidy, an analyst at Stifel Nicolaus.
"Emerging markets are good, enterprise is strong, the mature market consumer is a little bit weaker," Chief Financial Officer Stacy Smith told Reuters. "I'd say Europe was a little bit weaker than the U.S."
The Santa Clara, California company is rushing to develop more energy efficient chips for tablets and phones although it is not expected to become competitive in mobile any time soon.
It is also promoting Ultrabooks, a new super-thin category of laptops using Intel processors — similar to Apple's MacBook Air.
Early Ultrabook models, meant to combine the best features of tablets and laptops, may seem expensive to consumers, analysts say. But as new features are added to them Intel expects the Ultrabooks to account for 40 percent of the consumer PC market by the end of next year.
Shares of Intel have risen about 11 percent this year, outperforming the Nasdaq composite index, which has been flat. Analysts recommending the company say it has been punished too much for its lag in mobile computing and point to the stock's 3.6 percent dividend yield.