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Nvidia closes up more than 8% following blowout earnings, metaverse advances

Nvidia’s (NVDA) stock closed out the trading day Thursday with gusto, following its impressive Q3 earnings report on Wednesday. Shares of the chip maker ended the day up 8.25%, after jumping more than 10% at the open. The stock's performance comes after the company reported quarterly revenue jumped 50% year-over-year on the back of strong performances by its data center and gaming businesses in Q3.

Nvidia’s data center arm has been a boon for the firm, helping to power its stock price up 124% year-over-year at the close of trading on Wednesday. And the company’s earnings report only buoyed investor confidence in the business, which saw record revenue of $2.94 billion in the prior quarter, a 55% year-over-year increase.

Not to be out done, Nvidia’s gaming business also brought in record revenue of $3.22 billion, a 42% year-over-year increase.

The earnings report comes just a week after Nvidia CEO Jensen Huang hosted the company’s GTC 2021 conference, where it debuted new hardware and software related to its metaverse platform, called Omniverse, its self-driving vehicle initiatives, and its artificial intelligence work.

But Nvidia, like other chipmakers, has also been stung by the chip shortage. The company’s consumer graphics cards are incredibly scarce thanks to a run on them by both cryptominers and resellers using bots to grab as many cards as possible.

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As a result, cards are selling for hundreds of dollars above their manufacturer’s suggested retail price. Cards that should cost $599 are going for well north of $1,000, and finding any near their original prices is a pointless endeavor. Nvidia also doesn’t see the benefit of those inflated prices.

Nvidia still makes the majority of its cash on its games business, but the company’s data center arm has become increasingly important to the company’s future. The firm is a leader in large-scale artificial intelligence systems thanks to the power of its cards’ parallel processing, and it’s going to roll out its own CPU to ensure its data centers don’t have to use its competitors’ processors.

But not everything is going well for Nvidia. The company’s $40 billion plan to purchase chip designer ARM has hit a regulatory wall in the U.K. where it’s undergoing an in-depth review. It also needs to get through regulators in both the U.S. and China before it’s finalized.

Huang told Yahoo Finance Live, however, that the company is prepared to move forward with or without ARM — and that it will continue to be successful regardless of whether the deal goes through.

It seems investors have a similar level of faith in the company, as well.

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