Wall Street surprisingly punished Xilinx (XLNX) stock after the company's recent earnings report for the fourth quarter of fiscal 2019, overlooking its terrific top- and bottom-line growth, which is being driven by the deployment of fifth-generation (5G) wireless networks.

Xilinx's revenue jumped 30% year over year to $828 million in the fourth quarter, beating Wall Street estimates. Adjusted earnings per share shot up 34% to $0.94: roughly in line with what analysts were looking for. What's more, the midpoint of Xilinx's first-quarter revenue guidance of $835 million to $865 million was well ahead of the $841 million analyst estimate.

Despite these solid results, a pair of Wall Street analysts downgraded Xilinx after the earnings report, hurting investor sentiment and causing the stock price to sink. But this could be an opportunity for investors to buy more Xilinx stock, since the 5G catalyst that's driving its results is just getting started.

Hand drawing stock chart return.

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Don't miss the obvious catalyst

Revenue in Xilinx's communications business shot up a whopping 74% year over year last quarter, thanks to 5G deployments, which kicked off earlier than the company had expected. This segment accounted for 41% of Xilinx's total revenue in the fourth quarter.

Following the initial deployments in South Korea, demand for Xilinx's chips is growing, as 5G deployments accelerate in more regions across the globe. This will result in higher infrastructure spending and expand Xilinx's addressable market. IDC, for instance, estimates that the market for 5G network infrastructure will be worth $26 billion in 2022, up from just $528 million in 2018.

Unsurprisingly, Xilinx is preparing to take advantage of the potential growth by expanding its chip offerings to address the requirements of 5G. The company's radio frequency (RF) system-on-chip (SoC) portfolio now supports the entire sub-6-gigahertz (GHz) spectrum, which is a critical requirement for 5G deployment.

Such product development moves should help Xilinx land more 5G content. That's because 5G networks require more radios as compared with 4G, creating a bigger end-market opportunity for Xilinx. Xilinx executives said on a conference call with analysts that they are witnessing "more than our typical share of baseband revenues in this very early phase of 5G deployment."

The company has created a product road map to ensure that its 5G catalyst lasts for a long time, as the field-programmable gate arrays (FPGAs) that Xilinx makes eventually will be replaced by application-specific integrated circuits (ASICs).

This is because FPGAs are off-the-shelf chips that are programmed and reprogrammed by developers until a set standard is developed. FPGAs allow developers to make tweaks and conduct tests to find the optimum configuration. But once the standards are set, FPGAs typically are replaced by custom chips specific to that application. This is a problem that Xilinx is trying to overcome.

Xilinx's Versal adaptive compute acceleration platform (ACAP), for instance, could keep boosting the company's revenue into the later stages of 5G deployment. Unlike Xilinx's earlier chips that could only be programmed at the software level, the Versal platform can be programmed at the hardware level as well.

So Xilinx can make 5G-specific chips that will compete against ASICs in the future, ensuring that the company's 5G catalyst lasts for a long time.

Cheaper than before

Xilinx stock's latest crash has made it relatively cheap. The stock now trades at 34 times last year's earnings, compared with a trailing price-to-earnings (P/E) ratio of around 40 before the earnings were out.

XLNX PE Ratio (TTM) Chart

Xilinx Price-to-Earnings Ratio (TTM), data by YCharts. TTM = trailing 12 months.

Also, investors shouldn't miss the fact that Xilinx's earnings should continue to rise in the future, as evident from a forward P/E ratio of about 26. Analysts expect Xilinx to clock double-digit earnings growth over the next two years.

As such, now is a good time to take advantage of the recent crash in Xilinx stock. The proliferation of 5G networks could create substantial upside in the long run.