Intel's strong second-quarter earnings have triggered high-fives from investors and analysts. But while Intel beat expectations—and attributes improved sales to PC market growth—pundits disagree whether Intel's performance marks the beginning of a PC market comeback.

While year-to-year sales were down as a result of the global recession, Intel surprised Wall Street by posting a 12% boost in sales from the first quarter, surpassing the company's "informal" outlook in April of flat sales compared to the previous quarter's $7.1 billion. In addition, Intel said it expected a return to seasonal buying patterns in the third and fourth quarters, when computer makers typically buy more chips to meet rising PC demand in the back-to-school and holiday shopping seasons, respectively.

"Intel's second-quarter results reflect improving conditions in the PC market segment with our strongest first- to second-quarter growth since 1988 and a clear expectation for a seasonally stronger second half," Paul Otellini, president and chief executive of Intel, said in a statement.

Otellini's comments are in line with what the CEO noted in April: that the PC market had "bottomed out" after being hammered by the recession. But analysts disagree whether Intel's second quarter was an indication of increasing PC demand or of customers replenishing inventories that had been scaled back too much.

"Although the Intel quarter was clearly spectacular on all fronts, we continue to believe the upside was driven by inventory replenishment as we have not seen any evidence of increasing PC demand," investment bank J.P. Morgan told The Wall Street Journal.

Indeed, recent comments from Dell, the world's second-largest PC maker, support J.P. Morgan's position. Dell on Monday released a statement saying that demand for its products had stabilized, but varied significantly by customer segment and geography.

Specifically, consumers were spending, but demand from businesses had yet to pick up. As a result, Dell expected only a "slight" increase in sales in the fiscal second quarter ending July 31, compared to the previous quarter.

Bob O'Donnell, analyst for IDC, told InformationWeek that the market researcher is seeing a "genuine" increase in PC demand among consumers, particularly for low-cost notebooks. In the meantime, businesses, which have been holding on to their aging PCs, are likely to begin the replacement cycle next year.

"I actually think it (Intel's strong results) is around an increase in demand and not inventory replenishment," O'Donnell said, adding that IDC was "feeling more bullish" about the rest of this year.

"All signs point to a pretty reasonable second half, as Intel has said," O'Donnell said.

One of those signs is a more than $900 million drop in inventory at Intel over the last two quarters, suggesting that the oversupply in the supply chain has been fixed. In addition, PC sales in the second half of this year will likely get a boost in October with Microsoft's scheduled release of Windows 7, the software maker's next-generation operating system that has been getting high marks from reviewers.

Of course, all projections could get turned upside down if the global economy suffers a setback and unemployment continues to rise, prompting consumers to put away their wallets and delaying spending further by businesses.

In the meantime, investors on Wednesday reacted positively to the Intel report through a tech sector rally that pushed the Nasdaq Composite Index above the 1,800 mark.

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