Qorvo (NASDAQ:QRVO) was looking like a top stock to play the deployment of fifth-generation (5G) wireless networks and the adoption of compatible smartphones in October, and it hasn't taken long for the company to justify its status as a top 5G bet.

The chipmaker is well placed to take advantage of the sharp growth in 5G smartphone shipments thanks to its relationships with several major original equipment manufacturers (OEMs). That's why it wasn't surprising to see Qorvo crush Wall Street's estimates in Q2 of fiscal 2021 (ending on Oct. 3, 2020) and also provide terrific guidance for the current quarter.

Let's see what's working for Qorvo and why the chipmaker is capable of delivering more upside despite clocking gains over 100% over the past few months.

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Qorvo delivers yet another solid report

Qorvo has been in fine form in recent quarters thanks to the increase in demand for 5G smartphone chips. The chipmaker generated $1.06 billion in revenue last quarter, a jump of more than 31% over the prior-year period. Non-GAAP net income shot up nearly 56% year over year to $282.3 million and adjusted earnings came in at $2.43 per share as compared to $1.52 a year ago. Its non-GAAP gross margin increased 5.2 percentage points year over year to 51.7%.

Qorvo attributed its impressive growth to a multitude of factors, including an increase in chip shipments to several top-tier smartphone suppliers, new content gains, and the commencement of GaN (gallium nitride) amplifier shipments for use in 5G base stations. According to CEO Bob Bruggeworth, "Strength was diversified across customers and supported by multiyear technology upgrade cycles, including 5G and Wi-Fi 6. Customers are requiring more and better RF in highly integrated form factors to enable their next-generation products."

This is not the first time Qorvo has said that 5G is driving content gains. The company had earlier pointed out that each 5G smartphone could add $5 to $7 worth of content to Qorvo's kitty. It reiterated that claim once again on the latest earnings conference call, stating that "demand for 5G is adding RF complexity and driving higher content."

Hand holding a smartphone with a hologram of 5G rising from the screen

Image source: Getty Images.

The increased RF complexity in 5G smartphones is also triggering a "shift from discrete products to higher-value content including integrated modules in flagship and mass-market 5G smartphones." This is great news for Qorvo, as it gets around 71% of its total revenue from selling mobile chips, and that business is unlikely to lose steam anytime soon thanks to customers like Apple (NASDAQ:AAPL) and Samsung.

The mobile business brought in higher-than-anticipated revenue for Qorvo last quarter as Apple ramped up production of the iPhone 12 lineup. Though the chipmaker didn't point this out explicitly, it did say that "seasonal demand effects and the ramp of 5G smartphones" were key to the outperformance of the mobile business. With Apple reportedly accounting for a third of Qorvo's total revenue, the chipmaker was bound to get a shot in the arm.

Apple is reportedly looking to increase the production of the iPhone 12 to a range of 80 million to 85 million units this year as per third-party estimates. According to another estimate, as many as 230 million to 240 million iPhone 12 units could be shipped in 2021. This could pave the way for Qorvo to clock high growth rates in the coming quarters. Apple iPhone shipments have plateaued in recent years, but the iPhone 12 could help it regain its mojo.

More importantly, the emergence of 5G smartphones could be a multiyear catalyst for Qorvo because the shift to the new networking standard is likely to drive secular shipment growth.

Why Qorvo is still a good buy

Shares of Qorvo have nearly doubled since the end of March, but it continues to remain a solid bet for investors looking for a growth stock. The company's fiscal Q3 guidance points toward big gains once again. It anticipates $1.06 billion in revenue during the quarter ending in December, along with an adjusted gross margin of 52.5% and earnings of $2.65 per share.

The projections show substantial growth over the prior-year period's revenue of $869 million, non-GAAP gross margin of 49.3%, and earnings of $1.86 per share. Analyst estimates compiled by Yahoo! Finance predict that Qorvo could continue delivering high earnings growth rates in the future, and that looks likely considering the secular catalyst it enjoys in the form of 5G smartphone adoption.

Given that Qorvo stock trades at just 18 times forward earnings, it isn't too late for investors looking to buy a 5G stock right now, as it may have room to run higher.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.