Shares of Intel (NASDAQ:INTC) jumped on Friday following a strong fourth-quarter report and guidance calling for growth in 2020. The PC-centric business grew slightly despite increased competition from Advanced Micro Devices, and the data-centric business posted strong growth thanks to improving cloud demand. Intel stock was up 7.3% at 10:30 a.m. EST.
Intel reported fourth-quarter revenue of $20.2 billion, up 8% year over year and $980 million above the average analyst estimate. Sales of PC chips were up 2% to $10 billion, while revenue in the data center group soared 19% to $7.2 billion.
The data center growth was driven by rising demand from cloud customers. Data center group revenue from cloud service providers jumped 48% year over year in the fourth quarter, more than offsetting a decline in sales to enterprise and government customers.
Non-GAAP (adjusted) earnings per share came in at $1.52, up from $1.28 in the prior-year period and $0.27 higher than analysts were expecting. The company reduced operating spending by 1%, which helped boost the bottom line.
"One year into our long-term financial plan, we have outperformed our revenue and EPS expectations. Looking ahead, we are investing to win the technology inflections of the future, play a bigger role in the success of our customers and increase shareholder returns," said Intel CEO Bob Swan.
For the first quarter, Intel expects revenue of $19 billion and non-GAAP EPS of $1.30. For the full year, the tech company sees revenue of $73.5 billion, non-GAAP EPS of $5.00, and free cash flow of $16.5 billion.
While Intel's results were impressive, the company faces a serious competitive threat from AMD. Intel has already cut prices on some of its chips, and it will reportedly initiate broader price cuts on its PC chips later this year. AMD is going after Intel in the desktop, laptop, and server markets, a multi-front assault that could ding Intel's margins.
For now, Intel is flying high. The jury is still out on how long it lasts.