Intel ceded its title Thursday as the world's largest chipmaker, but the company delivered stronger second-quarter results than most investors expected.

The company benefited from unexpectedly strong PC sales and a strong boost in its highly profitable data center business, reassuring investors who had been concerned new technologies were leaving Intel behind.

"I'm very pleased with our progress, and I'm more confident than ever in our future and growth," Intel chief executive Brian Krzanich told Wall Street analysts on a conference call late Thursday.

Intel's stock has lagged the chip industry over the past few years, with memory technologies, communications chips and other products outpacing the company's focus on computer microprocessors. Taiwan Semiconductor Manufacturing Co. passed Intel in market value this year, and Thursday's financial results confirm that Samsung's chip division surpassed Intel in total sales last quarter.

The chip industry has been growing rapidly over the past few years, buoyed by demand for memory chips in smartphones and by new applications for computer technology in cars, appliances and home electronics.

Intel has expanded slowly, though, and its stock has been flat while the chipmaker began repositioning its business. The company eliminated 15,000 jobs last year, seeking to reduce its reliance on the PC market.

Intel has marked a number of milestones this year: It committed to spend $15.3 billion to buy an Israeli company, Mobileye, which specializes in technology for self-driving cars; and it just unveiled upgrades to its high-end processors for data centers.

On Thursday, Krzanich said the company is on track to begin selling its latest, 10-nanometer generation of chips in limited volumes late this year, with a broader release next year.

Intel shares jumped Thursday after the company reported financial results, but then settled back to a modest gain. It was up 0.4 percent in after-hours trading at $34.97. The stock has traded from $33.23 to $38.45 in the past year.

Intel forecast third-quarter sales of $15.7 billion, above Wall Street forecasts but flat from the same period last year. It projected earnings per share of 72 cents.

Intel credited robust PC sales, which still provide the majority of its revenue, for its second-quarter growth. And the increasingly crucial data center segment expanded by 9 percent, at the top end of Intel's forecast range.

Yet industry analyst Patrick Moorhead, who tracks Intel for Moor Insights & Strategy, said it's Intel's success in new markets that really stands out.

"What struck me was the diversity of their revenue and their ability to grow in areas where many doubted they could see a lot of growth or success," Moorhead wrote in his report on Intel's results.

Intel's nascent Internet of Things business grew 26 percent and its flash memory sales jumped 58 percent. Moorhead said that bodes well for Intel's long-term plan to expand beyond the PC market.

"All in all, this was a very solid quarter and gives indications of some many positive things for the future for Intel," he wrote.

-- Mike Rogoway; twitter: @rogoway; 503-294-7699