Nvidia (NVDA  ) shares surged higher by more than 10% following the company's very strong Q3 earnings report. Nvidia exceeded analysts' estimates on the top and bottom-line. Nvidia is now clearly the number 1 leading semiconductor company and now has an $800 billion valuation with some analysts thinking it should cross the $1 trillion level sometime next year.

Overall, Nvidia's stock is up by nearly 150% YTD. It remains the leading supplier of chips of a variety of fast-growing, tech categories like gaming, AI, cloud computing, etc. Now, the company has made its own plans for the metaverse that go beyond just hardware which it also discussed in the earnings call.

Inside the Numbers

In Q3, Nvidia reported $1.17 in earnings per share, topping expectations of $1.11 per share. It was also a 60% increase from last year, while revenue was 50% higher. The company reported revenue of $7.1 billion beating expectations of $6.82 billion.

It also issued Q4 revenue guidance that was above expectations at $7.4 billion vs expectations of $6.86 billion.

One standout was $2.9 billion in data center sales, a 55% increase from last year. Supply constraints seem to be easing at the same time as demand for data center chips increasing, potentially leading to higher volumes and prices. It's also seeing an increase in companies using its AI chips for applications like understanding human speech.

The positive results led to a flurry of upgrades from Wall Street analysts covering the stock in terms of price and EPS. This has continued a trend that has persisted all year. Since the start of the year, analysts have hiked 2021 and 2022 EPS from $2.8 to $4.4 and $3.2 to $4.8.

Nvidia remains one of the premier growth stocks in the market as it's a necessary and crucial company in the supply chain of most leading growth categories in tech. The company is quite expensive with a forward P/E of 71 and a price to sales of 40.

However, it's hard to imagine that the company can't keep growing as its end-markets are at the beginning or middle of their growth curves. And, the company has shown an ability to capture market share and value in new growth areas, higher up the value chain like it's doing with the metaverse.