Graphics-chip company $NVIDIA(NVDA.US)$ posted another quarter of record sales amid supercharged demand for videogaming and data centers.

America's largest chip company by market value has enjoyed a period of strong growth with the pandemic boosting consumer appetite for videogames and the wider adoption of digital services that run on data centers.

Nvidia said Wednesday that sales for the third quarter rose 50% to $7.1 billion, generating net income of $2.46 billion. The figures surpassed Wall Street expectations, with analysts surveyed by FactSet estimating the company would bring in $6.8 billion in revenue and $2.27 billion in net income. Revenue was buoyed by record videogaming sales of $3.2 billion, up 42% from the year-ago period, and record data-center sales, up 55% from the same time a year earlier.

Shares in the Santa Clara, Calif.-based company fell 3.1% to $292.61. They rose more than 3% in aftermarket trading following the results.

The strong results come in the face of a global semiconductor shortage that has dented sales of a diverse range of products, including gaming consoles and cars. Wait times for some types of processors are reaching record lengths and buyers are hoarding products. Intel Corp. Chief Executive Pat Gelsinger has said he thinks the shortage could last into 2023.

Nvidia said it has taken extra steps to assure long-term supply agreements and, as part of that effort, made $1.64 billion in advance payments in the third quarter. 

We feel very good about our supply situation, particularly starting in the second half of next year and going forward. 

-Chief Executive Jensen Huang said on an analysts call

Nvidia Chief Financial Officer Colette Kress on Wednesday said supply-chain constraints hitting car makers led Nvidia automotive sales to fall 11% from the second quarter, though they were still up 8% from the year-ago period as customers ramped up self-driving-vehicle programs, she said.

Mr. Huang also has been pushing the company into new markets, with increasing business providing chips for cars at a time vehicles use more processors. The company this year also said it would offer central processing units for data centers in a challenge to Intel.

Nvidia last year agreed to buy chip-design specialist Arm Holdings for around $40 billion in a deal that would further expand its reach. The deal still awaits regulatory approval and has drawn opposition from customers of U.K.-based Arm. The British government this week extended a probe into the deal, citing what it said were "significant competition concerns."

The U.S. Federal Trade Commission also has expressed concern about the deal. Ms. Kress said the company is "engaged in discussions with the FTC regarding remedies to address those concerns."

Nvidia has defended its planned purchase and said it wouldn't stifle competition. 

We continue to believe in the merits and benefits of the acquisition.

-Ms. Kress

China also has begun to review the transaction, Nvidia said.

Mr. Huang now has his sights set on the so-called metaverse, a loosely defined group of online realms where users playing as avatars can hang out and participate in immersive experiences with others. Nvidia is offering software called Omniverse Enterprise that offers collaboration and simulation tools such as the ability to create interactive artificial-intelligence avatars. The company has billed the set of tools as foundational to creating and connecting virtual worlds and customers can gain access to them on a subscription basis. Mr. Huang has said he thinks the metaverse economy has the potential to be bigger than the current one.

The metaverse, Mr. Huang said, will generate hardware and software sales, some in the near term. Digital avatars could come with a $1,000 a year subscription, he said, and growth in the metaverse will spur demand for Nvidia chips. Revenue likely will split with half generated by hardware sales and half by software licenses, he said.

This is really going to be one of the largest graphics opportunities that we've ever seen.

-Mr. Huang

Nvidia on Wednesday said it expects $7.4 billion in sales for the current quarter, beating forecasts, with data centers growing faster than gaming. Mr. Huang said data center customers concerned about chip shortages have made commitments that give Nvidia good visibility on that business.