Citi analyst Atif Malik raised his price target for Nvidia shares to $240 to reflect higher gaming sales and better gross margins post last night's October quarter results. The chip-maker in pre-market trading is up 5.08%, or $10.44 to $215.76.

More than 1,200 companies including, all major server manufacturers and cloud providers, are now using Nvidia's inference software platform, which far exceeded expectations, Malik tells investors in a post-earnings research note.

He thinks a strong inference software pipeline bodes well for continued data center growth next year supported by gaming and auto sales growth. The analyst keeps a Buy rating on Nvidia shares.