Nvidia Corporation, which features among the world's largest semiconductor manufacturers forecasted current quarter sales to be around $11 billion with a plus or minus 2 percent deviation, sending shares soaring 25 percent in post-market trading.

The artificial-intelligence boom has helped Nvidia become the fifth-most valuable US company by market value.

The $11 billion forecast was 50 percent higher than Wall Street estimates of $7.15 billion. The company also reported a strong earnings beat for the first quarter of fiscal 2024. It reported revenue of $7.19 billion for the quarter, whereas analysts were working with a $6.52 billion number. Earnings per Share at $1.09 also surpassed consensus expectations of $0.92.

When compared on a year-on-year basis, Nvidia's overall sales were down 13 percent from $8.29 billion last year. Net profit improved to $2.04 billion from $1.62 billion last year.

CEO Jensen Huang said that the company is seeing surging demand for its data center products. Prior to the after-hours move, shares of Nvidia have already doubled this year, rising 113 percent so far. The optimism is mainly driven by the company's positioning as a market leader for Artificial Intelligence chips.

Nvidia's data center business reported a 14 percent rise in sales to $4.28 billion during the quarter, compared to expectations of $3.9 billion. The performance was driven by demand for its GPU chips from cloud vendors and large consumer internet companies, which use Nvidia's chips to train and deploy AI applications like ChatGPT.

However, the company's gaming division, which led most of the outperformance during the earlier semiconductor demand surge, reported a 38 percent drop in revenue to $2.24 billion. This business also includes the company's graphic cards for PC sales. The number though, was better than the $1.98 billion estimate.

The Automotive division, which includes chips and software to develop self-driving cars increased by 114 percent in revenue, but remains a small portion of the business at $300 million.

Nvidia did not provide a full-year forecast on Wednesday, but Chief Financial Officer Colette Kress said the company had procured "substantially higher supply" for the second half of the year.

Analysts believe Nvidia reallocated some supply-chain capacity away from the slumping PC gaming market to its data center AI chips. Its PC gaming chips sell for as much as $1,500 while its AI chips fetch more than ten times that at about $20,000 each.

"Given the generative AI gold rush taking place, this should fuel demand for Nvidia's chips for the remainder of the year," said Edward Jones analyst Logan Purk.

(With Inputs From Agencies.)