Nvidia Corp. is bullish about its revenue outlook for the fourth quarter and released revenue forecasts above analysts’ expectations on Wednesday as an increasing number of companies look toward investing in artificial intelligence and the metaverse.

Nvidia, the world’s largest maker of graphics and AI chips, is optimistic that metaverse applications will require more computing power and boost demand for its chips.

The online world, which uses augmented and virtual reality to enable its users to interact, gained attention after Facebook, now renamed Meta, announced a leap from social media to the metaverse.

In October, Nvidia launched Omniverse Enterprise, a suite of software tools that enable companies to collaborate in building virtual worlds whose computing power emanates from the company’s chips.

Nvidia CEO Jensen Huang believes Nvidia will generate half of its revenue from chips that power Omniverse, while the other half will come from software.

The company expects revenue of $7.40 billion for the current quarter, up or down 2%, above analysts’ average forecast of $6.86 billion.

Nvidia has so far avoided major supply chain problems despite a global chip shortage, but supply chain costs are rising. Its outstanding inventories and long-term supply commitments are tied at $6.90 billion, up from $2.57 billion in 2020. In the third quarter alone, the company paid $1.6 billion to secure the supply.

On the flip side, revenue from Nvidia’s gaming division rose 42% to $3.22 billion and data centers increased 55% to $2.94 billion.

Taken together, revenue in the three months to October 31 rose about 50% to $7.10 billion, above the average analyst forecast of $6.83 billion. Earnings per share, adjusted, were $1.17, 6 cents higher than originally forecast.