Those who have been tracking chip manufacturer NVIDIA (NASDAQ:NVDA) -- well known for its graphics chips that have helped video games achieve increasing levels of cinematic versions of virtual reality -- delivered quite a pleasant surprise last week when the company reported its quarterly numbers.

First-quarter net income at NVIDIA tripled to $64.4 million, or $0.36 per diluted share, since this time last year. Revenues increased 24% to $583.8 million on a year-over-year basis. Analysts expected earnings of a mere $0.28 per share for the quarter.

Despite the blowout quarter, the company did predict that the second quarter would come in flat to slightly up. Long-term investors won't sweat out that sort of thing, though. It seems pretty obvious that for the time being, NVIDIA is well positioned to take advantage of some of the biggest digital growth areas around.

According to the company's conference call, among the few downsides was a decline in handheld revenues; the company relied on Motorola (NYSE:MOT) as a customer for its 3G phones, which didn't perform as expected. NVIDIA believes that that situation will be rectified in the second half of the year.

Some of the things driving NVIDIA's current growth trajectory are high-profile deals with the likes of Sony (NYSE:SNE); the next-generation PlayStation 3 will use NVIDIA chips.

Despite the fact that its deal providing chips for Microsoft's (NASDAQ:MSFT) Xbox is being phased out, NVIDIA says other areas such as the Sony deal should offset the loss. Meanwhile, the company has high hopes for broadband video- and MP3-friendly cell phones, both areas that many people see as important future movements, and plans to take advantage of the coming trend in high-definition (HD) TV applications.

(In fact, for those who are watching with interest the theory that some have put forth -- that phones will soon overtake standalone MP3 players like Apple's (NASDAQ:AAPL) iPod -- NVIDIA said in its conference call that it believes music phones will outnumber MP3 players by a factor of four. That prognostication gives investors a speculative view of the market for such phones and the processors that power them.)

Of course, NVIDIA still has to stave off competition from formidable challengers; its main rival is ATI Technologies (NASDAQ:ATYT) but names like Intel (NASDAQ:INTC) also want in on some of the action.

NVIDIA recently proved itself to be vindicated after a period of awkwardness, and that momentum continues. Factoring in the stock's appreciation last week, it's trading at a forward P/E of 21. Although it's not the bargain that it might have been before its earnings were announced, it still sounds rather inexpensive for company that appears to be proving itself very involved in the digital future. It stands to reason that investors might want to take some time to research and consider this stock.

Talk to Foolish fans of this stock on our NVIDIA discussion board.

Alyce Lomax does not own shares of any of the companies mentioned.