shares surge as much as 8 after hours as strong pc sales drive gross margins intel corp shares surged in the extended session thursday after the chip maker posted a surprise profit but while datacenter sales came in better than expected a larger beat in pc product sales drove margin improvement intel intc shares surged around 8 after hours following a 06 rise to close the regular session at 3455 the company reported secondquarter net income of 148 billion or 35 cents a share versus a loss of 454 million or 11 cents a share in the yearago period after adjusting for restructuring charges and other items intel reported 13 cents a share versus net income of 28 cents a share a year ago revenue fell to 1295 billion from 1532 billion in the yearago period and adjusted gross margins came in at 398 the company said intel had forecast an adjusted secondquarter loss of 4 cents a share on revenue of about 115 billion to 125 billion for the current period and adjusted gross margins of about 332 for the quarter analysts surveyed by factset on average expected a loss of 4 cents a share on revenue of 1212 billion the margin beat was largely a function of revenue intel chief financial officer david zinsner told analysts on a conference call and that revenue beat was much more pronounced in intel client or pc business than it was data center we had obviously beat revenue significantly and weve got a good followthrough in the fixedcost nature of our business and so that really was what helped us outperform significantly on the grossmargin side in the second quarter zinsner told analysts intel posted pcgroup sales of 68 billion and datacenter sales of 4 billion while analysts surveyed by factset had forecast 608 billion and 38 billion respectively before the conference call edward jones analyst logan purk told marketwatch in an interview following the report that most of the improvement in intels gross margin came from the unexpected amount of growth in the pc business the magnitude of client computing growth and how the pc market is recovering faster than anticipated came as a surprise purk told marketwatch the analyst who has a hold rating on intel said he expects sequential singledigit improvement in data center going forward still on the call intel chief executive pat gelsinger hammered home the point that intel was wholeheartedly going after the ai market which is expected to be dominated by nvidia corp nvda and to a lesser extent by advanced micro devices inc amd which reports earnings on tuesday we see ai being infused in everything and theres going to be ai chips for the edge ai chips for the communications infrastructure ai chips for sensing devices for automotive devices and we see opportunities for us both as a product provider and as a foundry and technology provider across that spectrum gelsinger said meanwhile network and edge sales came in at 14 billion while analysts called for 148 billion and foundry services revenue rose to 232 million for the quarter while wall street looked for 1492 million in the third quarter we do obviously at the midpoint see revenue growth sequentially and so that will be helpful in terms of gross margin zinsner told analysts on the call we expect again pretty good followthrough as we get that incremental revenue intel forecast thirdquarter earnings of about 20 cents a share on revenue of about 129 billion to 139 billion and adjusted gross margins of about 43 for the current quarter analysts surveyed by factset had forecast thirdquarter adjusted earnings of 16 cents a share on revenue of 1322 billion read intel may have bottomed but earnings will show if chip maker can hope to catch up to nvidia and amd in ai year to date intel shares have gained nearly 31 while the phlx semiconductor index has surged 49 the sp 500 has grown 18 the nasdaq composite has gained 34 and the dow jones industrial average is up more than 6 this content was created by marketwatch which is operated by dow jones  co marketwatch is published independently from dow jones newswires and the wall street journal