Much like Microsoft Corp. (MSFT) , Intel Corp.  (INTC) has an interesting blueprint for delivering moderate sales and earnings growth that includes investing big in major data center and cloud opportunities while keeping a PC cash cow roughly steady. Unlike Microsoft, Intel's blueprint could be upended by the resurgence of an old rival -- AMD Inc. (AMD)  -- that's in the midst of rolling out a string of intriguing products.

The chip giant's solid Q2 results suggest AMD is only having a limited impact on its performance for now. But as some recently-launched AMD products ramp and additional ones hit the market, there's some risk that the story will change.

Intel reported Q2 revenue of $14.76 billion (up 9% annually) and adjusted EPS of $0.72 (up 22%), beating consensus analyst estimates of $14.4 billion and $0.68. It also guided for Q3 revenue of $15.2 billion to $16.2 billion and EPS of $0.75 to $0.85, mostly above a consensus of $15.2 billion and $0.74. And for full-year revenue of $60.8 billion to $61.8 billion and EPS of $2.85 to $3.15, almost entirely above a consensus of $60.2 billion and $2.86 even after accounting for the fact that Intel expects its pending acquisition of Mobileye NV (MBLY) to add $200 million to 2017 revenue and $0.02 to EPS.

Shares are up a modest 0.5% to $35.15 as of the time of this article. Possibly keeping a lid on gains: Intel's sales guidance still doesn't imply much growth. At its $15.7 billion midpoint, Q3 sales guidance actually implies a slight decline relative to year-ago revenue of $15.78 billion. And full-year sales guidance only implies 3% growth at its $61.3 billion midpoint, even though revenue rose 8.5% during the first half of 2017.

This outlook has much to do with the fact Intel is maintaining a cautious view for its second-half PC CPU sales. On the earnings call, management said that while 2017 PC sales are trending a little better than previously expected, it still expects the PC total addressable market (TAM) to register a decline close to a prior forecast for a mid-single digit drop.

This downbeat forecast comes in spite of the fact Intel's Client Computing Group (CCG), responsible for PC and to a lesser extent mobile processor sales, was the main driver behind the Q2 beat. CCG revenue rose 12% annually to $8.2 billion, topping a $7.8 billion consensus. It helped that the segment's "Other/Modem" revenue rose 45% to $579 million thanks to iPhone 7 modem sales to Apple Inc. (AAPL) , but this was largely expected. A 10% increase in "Platform" revenue (mostly PC-related) to $7.6 billion mostly drove the upside.

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The Platform growth was fueled by a 20% increase in notebook-related chip sales, which easily offset a 3% desktop decline, and an 8% increase in total Platform average selling prices (ASPs). Unit volumes grew 3% -- nothing special, but better that industry PC shipment growth.

Intel's PC and mobile processor unit performed well in Q2. But will it last?

On the call, Intel noted that strong high-end PC demand is lifting ASPs, while singling out the gaming segment in particular. Intel, Apple, HP Inc. (HPQ) and others have all previously reported seeing high-end notebook strength. The company also reported getting a lift from inventory replenishment caused by better-than-expected demand, but insisted inventories remain at healthy levels.

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A tempered outlook for PC demand, along with an end to inventory replenishment, are definitely weighing on Intel's guidance. But in the wake of AMD's strong Q2 results and Q3 guidance (the result of both CPU and GPU momentum) one has to wonder if the rollout of AMD's Ryzen PC CPUs is playing a role as well. Particularly given the size of the slowdown Intel is forecasting, and the fact that desktop revenue declined in Q2.

Reviews for the high-end Ryzen 7 and mid-range Ryzen 5 desktop CPUs launched earlier this year have been reasonably good, and their sales should ramp meaningfully in Q3 thanks to launches of Ryzen systems by big-name PC makers ahead of the back-to-school season. AMD also just unveiled its low-end Ryzen 3 CPUs, and will soon launch its top-of-the-line Ryzen Threadripper CPUs for gamers and enthusiasts.

And ahead of the holiday season, AMD plans to launch notebook processors that pair a Ryzen CPU with a GPU based on AMD's new Vega architecture. Intel has already tried to counter AMD by speeding up the launch of its new Core i9 desktop CPU line -- some chips still won't be available until October -- and later this year plans to roll out desktop and notebook chips based on its next-gen Coffee Lake architecture. The big investments Intel has made over the years in improving the power efficiency of its notebook CPUs could help it fend off AMD in this market.

As CCG beat expectations, Intel's next three largest reporting segments -- all of which the company expects to grow in the coming years -- performed either as well or better than expected in Q2. Most notably, the company's massive Data Center Group (DCG - server CPUs and complementary products) saw revenue grow 9% to $4.4 billion.

This was fueled by a 35% increase in sales to cloud providers spending heavily on capex, and a 17% increase in sales to telecom carriers investing in network functions virtualization (NFV) systems that let them replace proprietary hardware with commodity servers. DCG also benefited from healthy networking and storage processor demand, and a 12% sales increase for "adjacencies" such as Ethernet chips, Omni-Path server interconnect fabric controllers and Xeon Phi co-processors.

The segment did see its enterprise and government sales drop 11%. Spending pauses ahead of the anticipated July launch of Intel's new Xeon Scalable server CPU line contributed, but so did cloud infrastructure adoption. And perhaps indirectly, adoption of Nvidia Corp.'s (NVDA)  Tesla server GPUs for AI and high-performance computing (HPC) workloads affected demand a little.

Watch: Jim Cramer Reveals When You Should Buy Nvidia

Going forward, AMD's recent Epyc server CPU launch could also impact DCG sales some. Intel's Xeon CPUs have big advantages over Epyc in areas such as product line breadth, developer support and complementary solutions, not to mention enterprise trust and familiarity. But Epyc's decent specs and AMD's willingness to price aggressively could win some converts. Nonetheless, Intel is sticking by a prior forecast for DCG revenue to grow by a high-single digit percentage this year.

Elsewhere, Intel's Internet of Things Group saw revenue grow 26% to $720 million (better than Q1's 11) thanks to strong automotive, industrial and video surveillance market demand. And a NAND flash memory boom cycle helped Non-Volatile Memory Solutions revenue rise 58% to $874 million. The Programmable Solutions Group, the product of Intel's $16.7 billion acquisition of top-2 FPGA developer Altera, was the only weak spot: Its sales fell 5% to $440 million.

Tech analyst Patrick Moorhead, was impressed by the diversity of the markets in which Intel was able to deliver solid growth in Q2. He added the upcoming addition or ramp of deep learning ASICs (meant to compete with Nvidia), Mobileye's automotive vision processors and 3D XPoint next-gen memory can act as fresh growth drivers, while cautioning AI and CPU competition will counterbalance these trends some.

If Intel can keep its PC CPU sales flat to slightly up and its margins/pricing healthy, its growth in other fields, together with the margin gains it's seeing in its PC business in the wake of big 2016 job cuts, should allow it to keep investors happy. Just as Microsoft's cloud software and services is growth is allowing it to offset minimal Windows growth.

But AMD is quite eager to throw a wrench into Intel's plans. And given how much Intel's smaller rival has improved its execution lately, its progress certainly bears watching.

Intel shares rose 1.2% to $35.38 Friday afternoon.

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