Intel shares rose in after-hours trading after the company reported second-quarter results above market expectations and issued third-quarter guidance.

On July 23, CNBC reported that Intel's quarterly revenue growth rate was 25 percent, the fastest pace since the third quarter of 2011.

AI infrastructure investment was at the center of the results. Intel said data center revenue rose 59 percent from a year earlier to $6.3 billion, helped by higher server processor sales. Revenue at its client computing group, which makes PC chips, also rose 13 percent to $8.9 billion. The focus of growth appeared to have shifted to the data center business.

Chief Executive Lip-Bu Tan (립부 탄) said in a statement on the earnings release, "AI is driving computing demand to unprecedented levels" and "Intel is positioned to secure sustainable growth across our CPU business." Intel said it has begun setting up long-term contracts with server CPU customers to meet the demand. Some contracts fixed prices, while others focused on securing volumes.

Its third-quarter outlook also topped expectations. Intel forecast adjusted earnings per share of $0.38 and revenue of $15.8 billion to $16.8 billion. The market had expected revenue of $15.1 billion and earnings per share of $0.27.

The stock was highly volatile after the earnings release. Intel shares closed down 2.33 percent at $100.23 in regular trading on July 23, but rose about 4 percent to around $104 in after-hours trading immediately after the announcement. The stock is up more than 170 percent so far this year and rose 84 percent last year. In July, it was down 28 percent. Despite the recent correction, AI-related server demand appeared to support investor sentiment again.

The company said current production capacity is not keeping up with demand. Chief Financial Officer David Zinsner (데이비드 진스너) said demand from data center customers is outstripping output. Intel said it has secured 10 long-term contracts. The expansion of long-term contracts seen first in the memory industry appears to be taking hold in server semiconductors as well.

Intel said it does not expect a strong recovery in the PC market in the third quarter. It forecast third-quarter PC sales would be flat due to a memory shortage. As a result, data centers and AI demand are more likely to be the core drivers of earnings improvement than PCs for the time being.

Intel is also accelerating an expansion of its manufacturing business. It said it plans to "meaningfully increase" capital spending next year to strengthen its foundry business that produces chips for other companies. Zinsner said in a CNBC interview that its latest process, 14A, is ahead of existing technology at the same stage of development.

Foundry revenue was $5.8 billion, up 31 percent from a year earlier. But it has not yet disclosed a large external customer that investors have been waiting for. Intel still produces a large share of its own chips. Earlier this week it secured Fortinet as its first named customer under Tan, but the deal is for security chips using an existing process rather than its latest process.

In this situation, the market's next focus is split in two. One is how long demand for AI servers can sustain Intel's data center growth. The other is whether the foundry business can lead to securing major external customers. This quarter's results showed AI demand is lifting Intel's core CPU business again, but the success of the shift to manufacturing still needs further confirmation.