What happened 

Sonos (SONO -1.73%) ended last week on a high note, after a judge ruled in its favor over a patent dispute with Alphabet's (GOOG -0.35%) (GOOGL -0.28%) Google. This win could potentially lead to more licensing revenue, so it isn't surprising to see Wall Streeters jumping on the bandwagon. On Monday, Sonos received a big upgrade from an analyst with Jefferies Financial Group.

The stock was up 7.6% at 10:07 a.m. EDT. This brings Sonos' year-to-date performance to 80%, significantly outperforming the Nasdaq Composite index.

SONO Chart

SONO data by YCharts

So what

Last week, a judge with the U.S. International Trade Commission ruled that Google had violated Sonos' patents for certain product features. These patents include synchronizing playback on smart devices, volume control, stereo pairing, and setup. 

Management said during the fiscal third-quarter earnings call that the five patents under dispute in this case are just the tip of the iceberg. Sonos' Chief Legal Officer Eddie Lazarus said that there were dozens more patents that Google has infringed. 

One analyst with Jefferies gave the stock a big vote of confidence today, upgrading the shares to a buy rating and raising the price target from $43 to $50. After proving in court that its patents were violated, Sonos could potentially pad its bottom line from licensing its technology to other tech companies.

A wireless speaker sitting on a desk next to a computer.

Image source: Getty Images.

Now what

As more people stream video and music at home, it's opening a huge growth market for Sonos, which is why winning the recent patent dispute is important.

The company reported another strong quarter last week, with revenue surging 52% year over year to $378.7 million. Management estimates its long-term addressable market to be approximately $25 billion just counting the global home audio market. The total audio market is worth $89 billion, which looks massive compared with Sonos' trailing 12-month revenue of $1.7 billion. 

"We believe that the strong demand for our products is unwavering and underscores the uniqueness and power of our business model where customers start with one product and expand with more over time," CEO Patrick Spence said in the fiscal Q3 earnings report.