Growth in Intel's data center and emerging technologies businesses added to the company's optimism around its emerging markets like IoT and artificial intelligence in 2017 and beyond.
"Our strategy is to be the driving force in the IT industry," said Intel CEO Brian Krzanich said during the company's fiscal third quarter 2017 conference call. "We've built a collection of businesses that can't be beat."
Krzanich said Intel already sees the benefits from growth in artificial intelligence, which is the smallest but fastest-growing part of the company's data center business. "You're going to see this as a bigger and bigger part of our business," he said.
Intel raised its full fiscal year 2017 revenue expectations by $700 million to $62.0 billion thanks to improved PC revenue.
Intel's Data Center Group revenue rose 7 percent, led by a 24 percent growth in cloud service provider revenue and a 9 percent growth in communications service provider revenue.
Intel reported overall revenue of $16.1 billion, up 2 percent compared to the $15.8 billion the company reported for its fiscal third quarter of 2016.
That growth includes the revenue from security company McAfee, which Intel spun out early this year. Excluding McAfee revenue, Intel revenue grew 6 percent.
Krzanich said that, while Intel's Client Computing Group revenue was flat at $8.9 billion during the third quarter, its Data Center Group revenue rose to $4.9 billion. Intel's data-centric business now accounts for about 45 percent of total revenue, up from about 30 percent in 2012, he said.
Krzanich said Intel's Internet of Things Group revenue rose 23 percent to $849 million. Intel's IoT business growth was helped by the closing of its Mobileye acquisition four months earlier than expected. The company has received design wins for autonomous automobiles from Waymo, BMW and Fiat-Chrysler, Krzanich said.
The company's Client Computing Group business, Intel shipped a record number of Core i5 and Core i7 processors, which Krzanich called "exceptional" given that the PC market as a whole is declining.
Intel's long-term view is that the PC business is stabilizing, but performance opportunities, such as from gaming or ultra-light PCs is growing. "For the very near future, we don't expect any shift," Intel CEO Krzanich said.
Intel's overall net income for the quarter, on a GAAP basis, came in at $4.5 billion, or $0.94 a share, compared to last year's net income of $3.4 billion, or $0.69 a share. On a non-GAAP basis, net income was $4.8 billion, or $1.01 a share, up from last year's $3.9 billion, or $0.80 a share.