NEW YORK (TheStreet) -- MKM Partners upgraded NVIDIA (NVDA) - Get Report to "buy" from "neutral" on Friday, setting a price target of $36 for the chipmaker, following its strong fiscal third quarter financial results.

Shares of NVIDIA were gaining 8.7% to $30.12 in morning trading.

The analyst firm raised its fiscal 2016 EPS estimates for NVIDIA to $1.08 a share from 80 cents a share. MKM also raised its fiscal 2017 and 2018 estimates for the graphics card maker to $1.49 and $1.37 a share from $1.17 a share and $1.10 a share, respectively.

"We see a sustainable growth trajectory, given its positioning to lead in significant paradigm changes favoring more valuable semiconductor solutions: automotive evolving from driver assist to autonomous driving, gaming transitioning to virtual reality and professional or social E-sports, and cloud computing increasingly using GPU accelerators for machine learning," MKM analyst Ian Ing wrote.

The analyst firm's note comes after NVIDIA beat estimates for earnings and revenue in the third quarter of fiscal 2016.

After the market closed on Thursday, NVIDIA reported earnings of 46 cents a share for the fiscal third quarter, well above the 25 cents a share for the quarter analysts surveyed by Thomson Reuters expected. Revenue grew 6.5% year over year to $1.31 billion in the quarter, beating analysts' estimates of $1.18 billion.

NVIDIA said it expects to revenue of $1.3 billion, plus or minus 2% for the fourth quarter of fiscal 2016. Analysts expect the company to report revenue of $1.21 billion for the quarter.

TheStreet Ratings team rates NVIDIA CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

We rate NVIDIA CORP (NVDA) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, solid stock price performance and good cash flow from operations. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

You can view the full analysis from the report here: NVDA

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