Graphics chipmaker Nvidia Corp. (NASDAQ: NVDA) reported third quarter 2011 earnings after the markets closed last night. The company posted EPS of $0.15, a penny better than estimates, on revenue of $843.9 million, a bit below expectations of $844.1 million. The big news, however, came from the outlook for an improved fourth quarter.

Nvidia now expects to post sales of $886.1 million in the fourth quarter, $20 million higher than current analysts’ estimates of $866.06 million. The company said it is “regaining share in desktops”, where it has suffered from competition with Advanced Micro Devices Inc. (NYSE: AMD) and Intel Corp. (NASDAQ: INTC).

Further strength for PC sales came in the earnings report from Lenovo Group Ltd. (OTC: LNVGY), which reported a +44% jump in profits in its second fiscal quarter on revenue of $5.76 billion, up +41% from the same period a year ago. Lenovo reported strong PC sales in all its regions, with emerging market revenue up a blistering +78%.

Corporate purchases are driving higher revenues for PC makers and for chip makers. Intel has said that it expects to beat analysts’ estimates on sales for the current quarter.

Nvidia is getting a boost from the use of its graphics processing units, called GPUs, as co-processors in high-powered computers. China’s Tianhe-1A, uses 7,168 Nvidia GPUs and 14,336 CPUs to power the world’s fastest supercomputer. According to Nvidia it would take more than 50,000 CPUs and three times the electricity to achieve the same results.

While the CPU is used to perform sequential operations, the Nvidia GPUs perform the arithmetic calculations that are required by the CPU and feeds the results back into the sequence. The GPUs are cheaper than the CPUs and require less power. What’s not to like?

This new use for Nvidia chips could grow quickly at the high-performance end of the market, but that is not a very large space. The company needs to move its GPUs down to the more mundane, everyday uses that businesses and individuals use. The market for high-performance graphics chips in PCs is also limited these days to hard-core gamers, another market that is small compared with business computing.

The overall outlook for PC sales is positive, at least for the next quarter. Research firm Gartner, Inc. (NYSE: IT) has projected total IT spending in 2010 to reach $2.4 trillion, rising to $2.5 trillion in 2011. Not all of that will be spent on hardware, obviously, but out of a boost in overall spending of $100 billion, desktops and notebooks can’t help but get some increased sales.

Nvidia shares have gained more than +5% today on higher than normal volume.