What happened

Last month I recommended buying Qorvo (NASDAQ:QRVO) stock over Skyworks -- and I have to say that today, that's looking like a pretty good call.  

Last night, Qorvo reported blockbuster earnings for its fiscal second quarter of 2020, and the stock is up 18.5% in noonday trading as a result. Non-GAAP (adjusted or pro forma) profits came in at $1.52 per share, 22 cents ahead of estimates. Quarterly sales of $807 million likewise beat expectations for $754 million with a stick.  

5G as a hologram hovering over a hand holding a smartphone

Image source: Getty Images.

So what

Granted, GAAP earnings weren't quite as strong as those pro forma numbers suggest -- but they were still pretty strong. Q2 GAAP earnings of $0.70 per share were nearly three times the $0.25 Qorvo earned a year ago -- not bad for a company that saw its sales slump 9% year over year.

Now what

And the news looks like it's only going to get better as the year progresses. Updating its financial guidance to lay out expectations for Q3, Qorvo management said it thinks sales should rise sequentially to range from $840 million to $860 million. If this is how things work out, it will be considerably better than the nearly flat revenues of $758 million that Wall Street has been predicting.

Earnings -- albeit still given in pro forma terms -- should be about $1.67 per share. That would be an even bigger mismatch between results and expectations; Wall Street is only looking for $1.35!

Long story short, "mobile demand" is "robust" and "5G handset volumes" are increasing, which mean only good things for Qorvo's business. Investors are buying the stock hand over fist -- and they're right to do so.