When short-term problems and nervous traders converge, you get a buy-in opportunity for long-term investors. That's the case today with chip designer and Rule Breaker Sigma Designs (NASDAQ:SIGM).

The stock fell hard in after-hours trading last night, because third-quarter sales came in far short of expectations. Sigma reported revenue of $35.5 million, down 31% from the previous quarter and 24% lower than the year-ago quarter.

Undaunted, CFO Tom Gay noted the share price drop in the customary analyst call, explaining that "some of the early after-hours trading was done before our guidance was revealed, and folks may not have realized that our message was that the low revenue for the quarter was not to be an expected trend."

Well, Sigma's stock hasn't recovered yet, despite ample opportunity to absorb management's guidance. This quarter fell short because some of Sigma's largest customers chose to install refurbished and surplus set-top boxes this quarter instead of ordering fresh ones -- with Sigma chips inside -- for their new customers. That's expected to be a one-time event, and there should be no further sales drops. In fact, the next quarter should rebound to sales in the lower $50 million range.

In other words, there are no signs of Sigma losing market share to competitors like Intel (NASDAQ:INTC) or Broadcom (NASDAQ:BRCM) in the company’s main IPTV set-top box market. Major customer AT&T (NYSE:T) will continue to roll out and promote its U-Verse digital TV service. Sigma's chips are also popular in Europe and Asia, where the customer list includes giants like China Telecom (NYSE:CHA), Vodafone (NYSE:VOD), and Deutsche Telekom (NYSE:DT). This quarter's sales drop was an aberration, caused by cautious customers. That situation can't last.

I don't see the IPTV sea change stalling in all of these enormous markets at the same time. Ergo, Sigma's growth will resume, bolstered by the recent acquisition of home networking expert CopperGate.

Today's price drop is a myopic, knee-jerk reaction that has little basis in reality. Enjoy the sale while it lasts.

Fool contributor Anders Bylund holds no other position in any of the companies discussed here. Sigma Designs is a Motley Fool Rule Breakers pick. Intel is a Motley Fool Inside Value pick. Motley Fool Options recommends Intel calls. Try any of our Foolish newsletters today, free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.