Nvidia said on Thursday that demand for graphics chips from its main video gaming market, cryptocurrency miners and data centre owners propelled sales higher than projected in the current quarter. Its shares surged in after-hours trading in New York, putting the company on track to open at a higher market valuation than veteran technology giant IBM.

Revenue in the fiscal first quarter will be US$2.9bn, plus or minus 2%, the Santa Clara, California-based company said Thursday in a statement. That would top the average analyst estimate of $2.4bn, according to data compiled by Bloomberg.

Nvidia founder and CEO Jen-Hsun Huang has jumped on trends that are changing computing to find new areas for his graphics chips.

The company’s gaming business, which generates almost 60% of revenue, has been supplemented by the diversion of high-end graphics chip cards into cryptocurrency mining

The biggest breakthrough has come as data centre operators increasingly use Nvidia products to perform the parallel work of artificial intelligence computing.

The company’s gaming business, which generates almost 60% of revenue, has been supplemented by the diversion of high-end graphics chip cards into cryptocurrency mining.

There’s also a flood of work being done on developing systems that will drive cars, which will provide another bump in demand in the next couple of years, Huang said in an interview.

“One growth driver after another just keeps on coming,” he said. “Maybe that’s the reason why we’re surprising people year in and year out.”

Nvidia has recorded revenue growth of more than 20% for the last seven quarters. It’s gone from quarterly sales of less than $1bn in 2014 to approaching $3bn.

The company, under its founder, has been ahead of its competitors in taking advantage of the shifts going on in computing. Nvidia, for example, is producing chips specifically designed to make cars self driving by being able to rapidly process camera images and recognise objects in the real world. In data centres, its products help make machines better at recognising natural speech and other tasks where learning is a key component.

Shares soar

The stock rose more than 11% in extended trading following the results, after closing at $217.52 in New York. Nvidia shares are the second best performer on the Philadelphia Stock Market Semiconductor Index this year with an increase of 12%.

Net income rose to $1.1bn, or $1.78/share, in the quarter ended 28 January, from $655m, or $0.99 a year earlier, the company said. Sales jumped 34% to $2.9bn. Analysts on average had projected profit of $1.16/share on sales of $2.7bn

Gaming revenue increased 29% to $1.7bn in the quarter. Data centre-related revenue was $606m. Automotive chip sales were $132m. — Reported by Ian King, (c) 2018 Bloomberg LP, with additional reporting by TechCentral