Intel's Record Quarter Doesn't Erase Revenue Concerns

Paul Otellini, Intel president and chief executive officer, said corporate consumer demand for advanced microprocessors helped Intel achieve these numbers, which topped analyst expectations.

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Doug Freedman, analyst at Gleacher and Company, said the second quarter is not typically reflective of consumer habits. Thus, it might be hard to gauge whether Intel can sustain its positive results throughout the year.

"I have always cautioned my customers from trying to take a measure of electronic demand in the second quarter. The second quarter is where we have no buying catalyst on the retail side. It's hard to figure out how we're going to do for the rest of the year," he said.

Still, Freedman was optimistic Intel has developed a sound strategy in case of a "double dip" recession. "They are running the business more tightly, not hiring many people. What they are doing is paying overtime and bonuses instead of hiring. Should business soften, it'll be much easier to ramp down than a head count," Freedman said.

Meanwhile, Intel doesn't see to be as worried as many of the analysts that cover it. The company raised its expectations for its full-year gross margin to 66 percent, previously it was 64 percent. The third-quarter revenue estimate was at $11.6 billion, plus or minus $400 million.

"Our outlook for the year remains robust," Otellini said in a conference call. In response to concerns over the struggling European economy, Otellini said, "Every geography was above our seasonal norm."

Furlong reiterated concerns that the iPad, which uses Apple's own chips rather than those made by Intel or its competitors. "There are minor concerns about the iPad. The iPad will take share from netbooks and Intel would be losing out in that circumstance," Furlong said.

However, Otellini said he did not think tablet computers would cannibalize the PC and notebook markets.  He also said this is an area Intel expects to get into.

One analyst that has confidence in Intel is Krishna Shankar, managing director at ThinkEquity, who sees positive growth for Intel in emerging markets. "A lot of their business has come from emerging markets like China, India and Brazil. Emerging markets should be strong, corporate should be strong, that should mask any weaknesses," said Shankar, who has a buy rating for Intel.

As far as how it might impact the rest of the semiconductor industry. With approximately 80 percent of the share, Shankar said, "Intel is a good bellwether for the rest of the industry."