(Adds forecasts, analyst comment, updates share price)
SAN FRANCISCO, Nov 8 (Reuters) - Graphics chip maker Nvidia Corp (NVDA.O) posted a sharply higher quarterly profit on Thursday on stronger sales of its products, especially ones for laptop computers.
Nvidia also forecast that its sales would rise by more than what Wall Street was expecting, and its shares rose 7 percent.
“They had great numbers, it’s hard to complain,” said Doug Freedman, an analyst with American Technology Research.
Nvidia said that net profit for its third quarter jumped to $235.7 million, or 38 cents per share, from $106.5 million, or 18 cents per share, a year earlier.
That beat the average forecast of Wall Street analysts for a net profit of 34 cents per share, according to Reuters Estimates.
Revenue rose 36 percent to $1.1 billion. Sales of graphics chips for desktop computers grew 33 percent over a year earlier while those for laptop computers rocketed 120 percent.
Freedman, who downgraded Nvidia shares to a “sell” two weeks ago, said the strong performance did not change his view that the stock was near a peak.
“I don’t believe they have a lot of (market) share gain available to them next year,” Freedman said.
Nvidia said it expected fourth-quarter revenue to grow by 5 to 7 percent, stronger than Wall Street had anticipated.
Nvidia also said it would work to hold gross margin at the current level, which was 46.4 percent in the third quarter, up from 45.3 percent it saw in the previous quarter.
Shares in the company initially fell as much as 5 percent in extended trading after the earnings report, but recovered to trade up 7 percent at $36.35. Over the past year, the stock has risen 37 percent, compared with a fall of more than 38 percent for rival Advanced Micro Devices Inc AMD.N. (Reporting by Scott Hillis; editing by Gary Hill)