As noted, despite the 13% decline in global PC demand that was reported by IDC, the fact that Nvidia's graphics processing unit, or GPU, posted an 8% increase in revenue was impressive. Not only has the company been "talking a big game" but consumers seem to be buying into Nvidia's industry-leading graphic chips, which are predominantly used in gaming. Management also backed up its prediction in profitability. Non-GAAP gross margins advanced more than 4% year over year to 54.6%. On a GAAP basis, the percentage move was the same, though slightly lower in absolute by 30 basis points. The better-than-expected performance was partly attributable to lower Tegra sales, which means that management is eating up the costs associated with developing Nvidia's mobile strategy.
What's more, Nvidia continues to secure business some prominent companies including Microsoft ( MSFT) and Google ( GOOG) where the Tegra is a key component inside both Surface and Nexus 7 tablets. Device manufacturers are beginning to realize Tegra's features such as low power consumption coupled with high performance makes this series one of the best chips on the market today.