Nvidia reported quarterly revenue above estimates as it quickens its expansion beyond personal computers into the market for tablets and smartphones.
Nvidia posted second-quarter revenue of $1.044 billion, up from $1.016 billion in the year-ago quarter. It estimated current-quarter revenue of $1.15 billion to $1.25 billion.
Nvidia is leveraging its graphics expertise to make high-performance processors, branded Tegra, for mobile devices. But it faces tough competition from the likes of Qualcomm, Texas Instruments and Samsung Electronics.
Nvidia won spots for its Tegra chips in two of the highest-profile tablets to be launched in 2012. Microsoft's Surface tablet and Google's Nexus 7 tablet.
"Our investments in mobile computing and visual computing are both paying off," said Jen-Hsun Huang, president and chief executive officer of NVIDIA.
"Tegra has achieved record sales as tablets come into their own. Our GPU business made strong gains in a weak market, boosted by our breakthrough Kepler architecture. Looking ahead, we're optimistic, as our investments position us right at the center of the fastest growing segments of computing."
"Going forward, the key focus is going to be Tegra, Tegra, Tegra," said Evercore analyst Patrick Wang. "I think it would be hard to argue that there's significant organic growth left in the discrete graphics market."
Consumer products accounted for more than 17 percent of total revenue in the quarter, up from 14 percent in the first quarter.