Intel delivered quarterly results that topped analysts' expectations on Tuesday.
The Santa Clara, California-based chipmaker posted third-quarter earnings of 64 cents per share on revenue of $14.47 billion. Analysts had expected the company to report earnings of 59 cents a share on $14.22 billion in revenue, according to a consensus estimate from Thomson Reuters.
Shares of Intel spiked as high as 1.8 percent before swinging into the red in extended hours. Stock moved back into positive territory as the market tried to digest the results.
"We executed well in the third quarter and delivered solid results in a challenging economic environment," said CEO Brian Krzanich in a press release. "The quarter demonstrates Intel innovation in action. Customers are excited about our new 6th Gen Intel Core processor, and we introduced our breakthrough 3D XPoint technology, the industry's first new memory category in more than two decades."
Alex Gauna, an analyst at JMP Securities, told CNBC's "Closing Bell" on Tuesday that Intel has seen a decline in its PC client group this year.
"On the surface it looks like the revenue is pointing to somewhat of a 'worst is behind us' kind of revenue trajectory for Intel, keeping in mind that it's been a tough year for Intel," he said. "So just looking at the top line, it looks like maybe the worst of those headwinds are behind us."
The PC group is under pressure, Gauna said, but Intel has been able to transition into the cloud business. "Fundamentally, Intel is the cloud right now — they are completely dominant with their family of chips. And that really is the opposite side of the weakness in PC."
The company reported that its client computing group's revenue of $8.5 billion was down 7 percent year over year. However, the data center group's revenue of $4.1 billion was up 12 percent over the same period.
Intel expects revenue of about $14.8 billion for the fourth quarter of 2015. Restructuring costs in that period could add up to $25 million. The company expects full-year capital spending of approximately $7.3 billion.
The PC market remains sluggish, and sales declined 10.8 percent in the third quarter, according to research firm IDC. Despite this, Intel's profitability should improve, wrote PiperJaffray analysts in a recent note.
As headwinds in the PC market continue, some analysts say Intel's data center is gaining in importance. The business, which develops platforms for digital services, is expected to grow revenue at a 15 percent rate through 2018, according to the company's website.
The data center unit now accounts for about 50 percent of Intel's profitability; revenue from the data center business grew 9.7 percent to $3.85 billion in the second quarter from a year earlier.
"People think of Intel as a PC company, but they're really not," Timothy Arcuri, a technology analyst at Cowen & Co., told CNBC on Monday.
As of midday Tuesday, Intel shares were down about 11 percent year to date, versus a 2 percent gain in the tech heavy Nasdaq index and a 2 percent decline in the .
— CNBC's Karma Allen and Fred Imbert contributed to this report.
Disclosures: JMP Securities is a market maker for Intel.