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What: Shares of Tower Semiconductor (NASDAQ:TSEM), more often known as TowerJazz, rose as much as 16.9% on Thursday. The specialty chip foundry reported second-quarter results before the opening bell, delivering positive surprises on both the top and bottom lines.

So what: TowerJazz's sales increased 29% year over year, to $305 million. Earnings more than quadrupled from $0.09 to $0.40 per diluted share. Analysts would have settled for earnings of $0.35 per share on sales near $300 million.

CEO Russell Ellwanger said that the quarter's strong results validated TowerJazz's strategy of catering to major trends in analog chip technologies. "Our major focus remains those trends that drive the Internet of Things," Ellwanger said, "namely seamless connectivity, low power consumption, and sensors. To address those trends, our business units serve multiple diversified and growing application segments with unique and differentiated technology offerings."

Now what: Looking ahead to the third quarter, TowerJazz set its revenue target at roughly $325 million. Hitting that goal would amount to 33% year-over-year sales growth -- an acceleration over this quarter's already impressive revenue boost.

Share prices have now gained 38% over the last three months. In a 52-week perspective, investors have essentially broken even. The stock is trading at a bargain-basement 5.4 times trailing earnings, which seems low given TowerJazz's skyrocketing sales, and management's clear strategy.

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