What's going on?

Nvidia reported better-than-expected quarterly earnings earlier this week, and the US chipmaker sure is in bright spirits about its remarkably cloudy-looking forecast.

What does this mean?

Nvidia made a name for itself by manufacturing graphics chips for gamers. That�s still the biggest part of its business today, so it�s a promising sign that the segment�s sales grew 42% last quarter compared to the same time last year. But it was Nvidia�s data center business � which sells cloud computing chips � that really impressed investors: its sales grew by a better-than-expected 55% last quarter. That helped boost the company�s revenue by 50% to a record high of $7 billion. Nvidia seems optimistic about the future too, giving a higher-than-expected revenue forecast for this quarter. Investors didn�t need telling twice: they sent its shares up 10%.

Why should I care?

For markets: Nvidia�s found its niche.
Nvidia�s share price has more than doubled this year, bringing its market value to around $800 billion. That�s over three times as much as that of rival chipmaker Intel, even though Intel�s yearly revenue is three times higher than Nvidia�s. Investors, after all, value growth above all things, and Nvidia has that locked down: its chips are far better suited than Intel�s to artificial intelligence, which is one of the fastest-growing areas of the cloud industry. That might be why Nvidia�s quarterly revenue has grown by 56% on average over the last two years, versus Intel�s measly 4%.

Zooming out: Life isn�t fair.
Sweet results or no, Nvidia�s probably a little bitter right now: the firm�s been trying to acquire British chip designer ARM for over a year, but Europe opened a potentially deal-scuppering investigation into the transaction last month. And it wasn�t done there, saying this week that it�s also looking to subsidize European chipmakers in a bid to ease the supply crisis � a move that would give them an unfair advantage over non-European chipmakers like Nvidia.