FBR Capital Markets raised its profit estimates of Nvidia Corp. (NASDAQ: NVDA), after the graphics chip maker reported solid third-quarter results that came in above Wall Street expectations.

The brokerage increased its 2011 pro forma earnings estimate to $1.10 a share from $1.03 a share and 2012 earnings view to $1.10 a share from $1 share. Wall Street expects Nvidia to earn 99 cents a share for 2011, according to analysts polled by Thomson Reuters.

For the third quarter, California-based Nvidia reported a net income of $178 million or 29 cents per share, up from $85 million or 15 cents per share last year. Excluding items, the company earned 35 cents a share, topping Wall Street estimate of 26 cents a share.

Revenue for the quarter grew 26.3 percent to $1.07 billion, while Wall Street analysts expected revenues of $1.06 billion for the quarter.

However, regarding shares, the brokerage said it was a difficult call with fundamental analysis.

While we generally believe shares are oversold in the $11-$12 range and overbought as they approach $20, management's steady execution and future growth initiatives have us considering increasing that range and shares seem increasingly interesting below $15, analyst Craig Berger wrote in a note to clients.

Berger, who has a market perform, rating on Nvidia stock, said he is assessing the sustainability of Nvidia's earnings power into 2012. Beyond this, the bears will say that Nvidia faces long-term GPU attach rate risks as Intel and AMD pursue integrated architectures, while the bulls will say that Nvidia could be a major PC processor supplier if Windows on ARM architecture is successful, not to mention handset and tablet opportunities.

The analyst also raised his price target on the stock to $20 from $19. Shares of Nvidia closed Thursday's regular trading session at $14.47 on Nasdaq.

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