It's interesting to see shares of Intel (INTC 0.70%) continue to power toward a 52-week high even after a guide-down for 2013 and a relatively uninspiring guide for 2014. While there is still plenty of pessimism surrounding the company's long-term prospects – particularly in phones and tablets – it seems that Wall Street is finally starting to warm up to this often criticized semiconductor name. Two questions that investors now need to ask themselves are:

1. Why does Intel keep powering higher?

2. Will this run extend into 2014?

Explaining the run
There are plenty of potential explanations for why Intel keeps moving higher. The most likely explanation is that investors are starting to believe that the PC market is showing signs of having bottomed. Indeed, the PC market in the US and other developed countries has actually begun to turn. The only unknown at this point seems to be developing countries and, in particular, China. In China, sales of lower-end PCs continue to show weakness. It seems only natural that the market will bottom out there just as it has in developed countries, but the only question is when. If it's soon, then Intel's financial results in 2014 could be better than the guidance given at last month's analyst day.

However, another explanation could simply be that there is real optimism surrounding Intel's mobile strategy. While the company has made it clear that thanks to very aggressive contra-revenue programs (to offset a richer bill of materials) that it won't recognize much (if any) net revenue from the sales of its Bay Trail system-on-chip products, this isn't so important. The short-term financial pain from these actions will – if successful – lead to long term profitable growth in mobile once these bill-of-materials subsidies are no longer needed with the 2015 generation of Intel chips.

Can Intel outperform in 2014?
Despite the new-found optimism in Intel shares, it's tough to ignore the fact that while the NASDAQ is up about 34% year-to-date, Intel is up only 24% year-to-date. Now, this isn't terrible considering that large-cap semiconductor peer (and smartphone chip superstar) Qualcomm (QCOM -0.39%) is up just 19% year-to-date and Broadcom (NASDAQ: BRCM) – well known for its success in connectivity combo chips for handsets and a competitor to Intel in mobile apps processors and modems – is actually down 12% for the year. That being said, investors typically buy individual stocks in a bid to outperform the market on a risk-adjusted basis.

At this point, it seems that Intel's share price will be much more dominated by news-flow than by anything else. A further "recovery" in the PC market during 2014 coupled with major design wins in tablets and even phones would probably be enough to send the shares well north of $30. Further, the stock has a very significant short interest (over 200 million shares sold short), which means that short covering could drive further upside in the event that the company exceeds expectations.

Foolish bottom line
If Intel can gain market share against Qualcomm in LTE baseband chips and applications processors, then this will go a long way to driving sentiment and perhaps the share price up in 2014. That being said, the state of the PC market is going to be critical here. If it bottoms, then the mobile opportunity will be seen as icing on a very profitable cake. If it doesn't, then even success in mobile doesn't guarantee that Intel will be able to meaningfully grow earnings. Either way, 2014 should be a very interesting year for Intel and its shareholders.