Shares of chip technology developer MIPS Technologies (Nasdaq: MIPS) are hurting today, down nearly 13% in early trading. Last night's second-quarter report delivered strong earnings but weak sales, and the market reaction makes it clear which of those fundamental metrics matters most to MIPS. It's all about sales growth and new markets right about now.

To be clear, the company's sales are on an upswing: Second-quarter revenue of $21.9 million was a 44% upgrade from the year-ago period. License revenue of $7 million was an 85% year-over-year improvement. There's plenty of traction going on here, just not enough to satisfy investors.

MIPS shares are now about 25% cheaper than the $18.19 highs it set two weeks ago, but the stock has still tripled over the last 52 weeks. Expectations are clearly sky-high, and MIPS' management is happy to feed them more fuel.

CEO Sandeep Vij noted that his company is making inroads into the networking, digital home, and mobile markets. The crown jewel of the quarter? "Now that we have publicly shown the first MIPS-based smartphones and tablets, we look forward to continued traction in this area," Vij said.

The company did indeed show off Android tablets and smartphones at the Consumer Electronics Show earlier this month. While brand names like Velocity Micro and Sanno might not excite anyone, they are ready to ship into leading retailers Best Buy (NYSE: BBY) and (Nasdaq: AMZN), and they look like snappy performers despite running at low, battery-friendly processor speeds.

There's very little to complain about in MIPS' financial performance, except that growth-hungry investors got a bit ahead of themselves for a while. The company is getting ready to challenge ARM Holdings (Nasdaq: ARMH) for mobile superiority with the backing of a strong slate of licensees that includes Broadcom (Nasdaq: BRCM) and Sigma Designs (Nasdaq: SIGM).

If you're as excited about mobile growth as Vij is, you can give MIPS a thumbs-up rating on your CAPS scorecard. Otherwise, just add the stock to your watchlist and wait for a better entry point.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. Best Buy is a Motley Fool Inside Value selection. Sigma Designs is a Motley Fool Rule Breakers pick. and Best Buy are Motley Fool Stock Advisor recommendations. The Fool owns shares of Best Buy. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.