Intel’s earnings call was yesterday, and despite of some pessimistic expectations the chipmaker reported blockbuster first quarter profits. Intel reported $3.2 billion, up 29 percent over the same period last year, and revenues also up at $12.8 billion, or about 25 percent than the previous year. We’ve also learned that CEO Paul Otellini put an emphasis on Smartphones and tablets during the earnings call, and that the company has serious plans around Android.

When speaking about Honeycomb, Otellini noted that “we’re actively doing the port on that.”   But what got analysts really excited is Intel’s dominance in the PC segment. In contradiction to two market research firms and a perception that iPad sales are sapping demand for PCs, sales of chips used in personal computers rose 17%. Nevertheless, high chip demand periods are historically followed by downturns, and some analysts including Goldman Sachs’ James Covello are weighing that in.

“We see significant cyclical risk given: (1) We believe Intel overshipped PC end demand by 12% in 1Q (Exhibit 1). As a result, we expect Intel’s revenues to correct relative to PC units over the course of the year.”

Many analysts have raised their estimates, but they share similar concerns and advice to remain cautious. Still, this hasn’t stopped Intel’s shares from jumping d 6.8 percent to $21.21 after it has released second quarter sales estimates that may exceed analysts’ estimates yet again.

Intel is growing is share of the PC and mobile markets, but chief financial officer Stacy Smith admitted that notebooks – a $400 million business for Intel – is the market set to take one of the hardest hits from the rise of the tablet. This is precisely why Intel is working hard to strengthen its hold of the mobile market, and one of the key drivers behind Oak Trail, the latest version of the Atom microprocessor designed for mobile devices and tablets.