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What happened

Applied Micro Circuits Corporation's (NASDAQ: AMCC) stock price has jumped nearly 16% today as of noon EDT after the chipmaker reported better-than-expected fiscal year 2017 second-quarter earnings with an upbeat outlook after the market closed the day before. 

So what

Applied Micro Circuits reported sales of $41.8 million for its fiscal Q2 2017 ended Sept. 30, up 5.3% year over year and its seventh straight quarter of revenue growth. The company actually reported a net loss of $4.6 million, or $0.05 per share, but that's a wide improvement over the $0.12-per-share loss in second-quarter 2015.

Image source: Applied Micro circuits

By non-GAAP measures, earnings per share rose to $0.02, above analysts estimates of a $0.01 loss and well above the non-GAAP $0.03 loss in the first quarter. "Our Connectivity business once again drove the improvement in top line results," said CEO Dr. Paramesh Gopi in the earnings release, "and higher gross margins combined with greater operating efficiencies led to a return to profitability on a non-GAAP basis."   

Now what

Going forward, Applied Micro Circuits expects Q3 revenue in the range between $42.5 million and $43.5 million, which would be a 7% increase over fiscal third-quarter 2016 on the high end of the range. Most analysts have rated the stock either a hold or a neutral in recent months, but the average target price of $8.43 still represents a 23% spike even after today's increase.