Nvidia reported a better-than-expected 53.6% surge in quarterly revenue, driven by strong demand for the company’s graphics processing chips used in personal computers and data centers.
Shares of the company, which also forecast current-quarter revenue above analysts’ average estimate, were up 9.8% at $74.40 in after-hours trading on Thursday.
Nvidia (NVDA) also increased its quarterly dividend to 14 cents per share from 11.5 cents per share and also authorized an additional $2 billion under its buyback program.
The Santa Clara, California-based company dominates the high-end PC gaming market, where its chips are used to power graphically demanding games such as Electronic Arts’ Titanfall 2 and Activision Blizzard’s Call of Duty series.
Revenue from the company’s graphics processing units business, which contributes 85% of its total revenue, rose 52.9% to $1.70 billion in the quarter.
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Apart from producing chips for the gaming industry, Nvidia has diversified into newer areas, ranging from virtual reality to chips used in self-driving cars.
Revenue from the company’s automotive business, which recently signed an agreement to supply chips for Tesla Motors’ (TSLA) Autopilot system, soared 60.8% to $127 million.
Nvidia forecast revenue to increase to $2.10 billion, plus or minus 2%, in the current quarter. Analysts on average were expecting a rise to $1.69 billion, according to Thomson Reuters (TRI)
Excluding items, Nvidia earned 94 cents per share in the second quarter.
Revenue rose to $2.00 billion from $1.31 billion.
Analysts on average had expected revenue of $1.69 billion.
The company’s net income rose to $542 million, or 83 cents per share, in the third quarter ended Oct. 30 from $246 million, or 44 cents per share, a year earlier.
Up to Thursday’s close of $67.77, shares had more than doubled this year, handily outperforming the 6% gain in the broader S&P 500 index.