When Intel (INTC - Get Report) announced massive layoffs and outlined a new strategy this spring, the chip giant made it clear its moves were fueled by a belief that the personal computer market is in decline, and that more of its resources need to be directed towards growth opportunities such as server CPUs, embedded processors and new memory technologies.

The company's latest earnings report doesn't necessarily call into question Intel's ability to pull off its transformation -- indeed, the company has already gone a long ways towards achieving it. But it does suggest that the effort will be more challenging in the near term than many have assumed, and that PCs aren't the only major Intel end-market that will struggle to grow in the upcoming quarters.

About a month after hiking its third-quarter guidance on account of better-than-expected PC CPU sales, Intel posted revenue of $15.8 billion and adjusted EPS of 80 cents, topping the consensus estimate of $15.6 billion and 72 cents a share. Revenue rose 9% annually on a reported basis, and 6% when backing out the $425 million revenue made possible by Intel's $16.7 billion purchase of Altera.

However, Intel guided for fourth-quarter revenue of $15.7 billion (plus or minus $500 million). That's below a $15.86 billion consensus estimate at the midpoint, and (though baking in Altera's sales) implies 5% growth. The company also forecast its gross margin would slip to 63% (plus or minus 2%) from 64.8% in the third quarter and 64.3% in the fourth quarter of 2015.

It blamed costs related to ramping new memory products/plants and factory startup costs for Intel's 10-nanometer manufacturing process; the first 10-nm processors are due in the second half of 2017.

Shares fell 5.5% in after-hours trading Tuesday after going into earnings just 61 cents below a 52-week high of $38.36. In Wednesday's morning trading, Intel shares were down 5%. Rivals AMD (AMD - Get Report)  fell 1.5% on Tuesday, while Nvidia  (NVDA - Get Report)  was down slightly.

On its earnings call, Intel suggested inventory cuts within the PC supply chain will weigh on 4Q sales; last month, inventory replenishment was cited as the main reason for Intel's 3Q guidance hike.

The company's Client Computing Group (CCG), which is responsible for PC and mobile chip sales, saw revenue rise 5% in the third quarter to $8.9 billion. But that had much to do with a 53% increase in the segment's "Other" revenue, which includes the 4G modems Intel is supplying for the iPhone 7, to $634 million.

With global PC demand still fairly weak, it looks as if CCG revenue growth will return to negative territory in the fourth quarter. In addition, the division will likely see tougher competition in 2017 thanks to the launch of AMD's anticipated Zen CPUs.

Also of note: Intel forecast its Data Center Group (DCG), which supplies server CPUs, networking and storage processors and various complementary products, will deliver only high-single digit growth in 2016. That's below prior guidance for low-double digit growth, as well as a forecast for DCG to see a 15% compound annual growth rate (CAGR) from 2014 to 2018.

Weak enterprise server demand, caused in large part by the migration of enterprise workloads to cloud infrastructures, is the main culprit here. Enterprise DCG revenue fell 3% in spite of strong demand for non-server CPU products, and although the company suggested sales could improve a bit, it cautioned the enterprise isn't expected to be a growth area.

It may have been wishful thinking for markets to expect Intel to keep growing enterprise revenue at a healthy clip when so many of the major enterprise server and storage providers it sells to are posting sales declines.

Other parts of DCG are certainly doing much better. Sales to cloud service providers rose 32%, as the likes of Alphabet's (GOOGL - Get Report) Google, Amazon (AMZN - Get Report) and Facebook (FB - Get Report) continue spending heavily on their infrastructures. Over the long run, Intel's sales to this segment could be hurt by the adoption of CPUs based on ARM cores or IBM's Power architecture, but for now, cloud giants still rely overwhelmingly on Intel.

In addition, Intel saw a 16% increase in sales to telecom service providers, whose adoption of network functions virtualization -- a technology that allows proprietary network hardware to be replaced by commodity systems running on off-the-shelf processors such as Intel's -- is providing a boost.

Intel's Internet of Things Group, which supplies processors for embedded hardware, rebounded from a soft second quarter by growing sales 19% to $689 million. The retail, transportation and video (surveillance system) verticals were cited as strong points for the business.

Thus cloud, telecom and IoT -- three end-markets Intel has been counting heavily on to drive long-term growth -- are faring pretty well right now. And though down 1% in the third quarter, memory sales should grow nicely in 2017 as Intel ramps production of 3-D NAND flash memory and its 3-D XPoint next-gen memory, developed in partnership with Micron (MU - Get Report) .

But with PC and enterprise server CPUs still making up a solid majority of Intel's sales, there's only so much these markets can do to boost growth for the time being. That can make for a volatile ride for investors.