What: Shares of InvenSense (NYSE:INVN) jumped 28.3 in October, according to S&P Capital IQ data, driven by the motion chip company's better-than-expected third-quarter results. Even so, thanks to a particularly severe market reaction following its quarterly report in August, InvenSense is still badly lagging the broader market's modest year-to-date return:

INVN Chart

INVN data by YChart.

So what: Interestingly enough, that August report was generally solid, but was overshadowed by cautious guidance as InvenSense management worried of potential macroeconomic challenges and consumer sentiment in both China and the U.S. 

But then in October, InvenSense confirmed a repeat solid performance in Q3, punctuated not only by increased traction in new market verticals like optical image stabilization and its FireFly system-on-a-chip but also the successful ramp of high-volume production for its new 6-axis MotionTracking device for a major North American customer. InvenSense also reminded investors of its outsized focus on innovation, unveiling a new fingerprint sensor solution that allows OEMs more design freedom without cutting holes in the face of the device -- something management claimed it is working with "motivated partners" to quickly bring to market.

Perhaps more pertinent to InvenSense stock's subsequent upward move, InvenSense issued "cautious" guidance that was more or less in line with analysts' expectations, but also offered some room for optimism.

Now what: Specifically, InvenSense CFO Mark Dentinger said the company has "a pretty good signal from [its] biggest customers about what their anticipated volumes are going to be for next quarter." At the same time, he described "considerable traction" in the company's efforts to capture design wins in the "other bucket," which notably contains much of InvenSense's Internet of Things solutions. 

"If that were to go well," Dentinger added, "that would probably give us a little bit of upside."

And that's fair enough. From a long-term oriented investor's viewpoint, InvenSense shareholders are right to celebrate their company's prudence. But it's also nice to receive a reminder that we're still in the early stages of a burgeoning industry with massive upside for companies able to secure market share -- a group to which I'm convinced InvenSense consistently proves it belongs. In the end, with InvenSense shares still down more than 20% year to date, I think the stock has plenty of room to reward patient investors going forward.

Steve Symington owns shares of InvenSense. The Motley Fool owns shares of and recommends InvenSense. 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. The Motley Fool has a disclosure policy.