As a longtime bull, I was somewhat disappointed with Intel's (NASDAQ:INTC) first quarter. Yes, total revenue climbed  8% to $14.8 billion to kick off the year marking yet another record-breaking quarter, but there were also warning signs, including anemic growth in what has become Intel's core focus: Namely data centers and the Internet of Things (IoT).

Old-school PCs were, and still are, the primary revenue driver, but as investors saw in Intel's second quarter, the so-so start to 2017 was little more than a blip on the radar. PC sales are still leading the way, but CEO Brian Krzanich's transformation to high-growth markets rebounded which is one reason I still love Intel.

Computerized picture of a complex highway digitally "connected."

Image source: Getty Images.

A couple of hiccups

Intel  stock trades at a valuation well below both its fellow tech brethren and the overall market -- at 12.5 times future earnings, it's valued at approximately 30% less than its peer group and 40% below the Standard & Poor's (S&P) 500 index -- largely due to concerns it's still overly reliant on PCs.

The first quarter's $8 billion in revenue from PCs was a 6% increase year-over-year, which was more than respectable. What was disappointing was Intel starting the year with a mere 6% increase in data center sales to $4.2 billion. And the once high-flying IoT unit reported just $721 million in revenue, just an 11% improvement.

For a self-proclaimed data-first company focused on what are still early stage growth opportunities, Intel's meager first quarter results had myself and a host of others concerned. But then Intel shared its second quarter financials, and the love is back.

Now that's more like it

It could be argued, as one analyst recently has, that after years of continual sales  declines, the PC market is close to stabilizing. Assuming that's the case, and with the advent of gaming-specific PCs and other niche markets still driving sound results, it's likely Intel's client computing group should continue to perform. Intel recently took the wraps off its Core X family of solutions for the gaming and virtual reality (VR) markets. Intel set yet another record with a 14% jump in revenue to $14.8 billion last quarter, led by $8.2 billion from PC-related sales, good for a 12% increase.

Gaming has long been a mainstay of longtime Intel competitor NVIDIA (NASDAQ:NVDA). With NVIDIA's new GeForce 1080 chip set -- "the world's  fastest" -- now on the shelves, its skyrocketing sales aren't over. Citing both strong gaming and data center growth, NVIDIA's total revenue shot up a jaw-dropping 48% last quarter to $1.94 billion. But Intel is readying itself for the likes of NVIDIA and others as it pursues the estimated $250 billion market opportunity in data.

Intel's data center division didn't exactly blow the doors off, but its 9% year-over-year improvement to $4.4 billion was sound, if not spectacular. Intel followed its data results with a 26% rise in IoT revenue to $720 million, more than twice the growth rate in the first quarter on a percentage basis. Non-volatile memory sales -- another data-related storage market opportunity -- shot up a remarkable 58% to $874 million.

Final thoughts

For investors that don't look beyond the surface, Intel may not impress. And considering Intel's stagnant stock price despite a string of record-breaking quarters, it not getting much love -- which is exactly why Intel is long-term value investors dream stock.

A ridiculously low valuation, a 3% dividend yield, market opportunities in the hundreds of billions in the years ahead, and the expected closing of its mammoth deal for autonomous driving leader MobilEye pending, there's a lot to love about Intel, particularly for those looking for a long-term relationship.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.