Nvidia shares soared 15 percent on Wednesday, their biggest one-day rise in over two years, as investors bet the company's new chips would win it a major stake in future tablets and smartphones.

The rise in Nvidia's stock brought its gain since the company's debut last week of its new Tegra 2 dual-core mobile chips to about 50 percent.

Wedbush analyst Patrick Wang said the stock was trading purely on momentum at this point.

He said he had been taking calls from clients to help them estimate how large an impact Nvidia's mobile chips could make on the market.

Nvidia's new chips, boasting powerful graphics processing horsepower, give it a lead but competition is expected to increase from Qualcomm and Texas Instruments.

Look for all of Nvidia's competitors to come out and throw their hats in as well, Wang said. You've got very large, powerful technology companies that are all going for the same market.

Micron Technology Inc shares rose 7.1 percent to $9.34 after investor relations vice president Kipp Bedard told investors at a Needham & Company conference that a downturn in prices for DRAM memory chips was turning around quickly.

Shares of Cisco, Dell and other technology heavyweights also rose ahead of bellwether Intel's kick-off of the technology sector's quarterly earnings season on Thursday.

Major technology companies are expected to keep up sales and profit growth in 2011, although concerns about economic growth in the United States and Europe could temper results.

PUSH INTO MOBILE

Nvidia, based in Santa Clara, California made its name designing high-end graphics chips for PCs.

But as competition increased with Advanced Micro Devices Inc and Intel expanding into its market, Nvidia's co-founder and Chief Executive Jen-Hsun Huang pushed into mobile, combining central processors based on ARM Holdings Plc architecture with Nvidia's own graphics technology.

Wednesday's stock rise was Nvidia's largest in a single session since October 2008, and its shares have doubled since October 2010.

Interest in Nvidia was high in the options market, as well, with more than 29,000 call options with a January strike price of $22.50 trading on Wednesday, according to Caitlin Duffy, equity options analyst at Interactive Brokers.

The majority of the calls traded on the ask, indicating buyers are dominating volume at that strike today, said Duffy. Heavy activity was also seen at the $24 and $25 strike prices, she said. Nvidia's shares closed at $23.35.

Validating Nvidia's focus on graphics technology, Intel said earlier this week it would pay the company $1.5 billion to license its patents, settling a legal dispute.

And at last week's Consumer Electronics Show (CES), Nvidia said it was developing an ARM-based PC central processor, directly challenging Intel in its own traditional market.

At the CES trade show, Motorola, LG, Dell, Acer, Asus and Toshiba Corp announced or showed smartphones and tablets using Tegra chips.

Adding to upheaval in the chip industry, Advanced Micro Devices' chief executive, Dirk Meyer, left the company this week due in part to the company's lack of a mobile strategy.

People are digesting the Intel settlement, digesting CES ... Their primary competitor (AMD) just got a lot weaker, said Alex Gauna, an analyst at JMP Securities. Micron makes NAND flash memory used in smartphone and tablets.

(Additional reporting by David Gaffen in New York; Editing by Andre Grenon and Steve Orlofsky)