Shares of OLED technology expert Universal Display (Nasdaq: PANL) spiked this morning, up by 15% as I write this on a distinctly skyward trajectory. So last night's second-quarter report has brought the stock back to prices not seen since, oh, last Friday.

The scale of the bounce is debatable, because I think that Universal Display belongs at much higher prices than this. But the direction of this investor reaction is absolutely correct.

Revenue jumped 33% year over year to $11.2 million, led by a 170% increase in commercial sales. Development revenue fell 8% unless you remove a one-time technical assistance payment from the year-ago quarter, in which case it's a 36% improvement.

This is the last time Universal Display investors need to worry about those old warrant liabilities, as the last papers expire in two weeks. In recent quarters, those warrants have been a drag on GAAP earnings on the back of rising share prices; this time it's the other way around and the sinking value of these industrial-strength call options turned into a substantial boost to GAAP earnings. But as CEO Steve Abramson said, "as we discounted the stock warrant liability which inflated the loss, it's only fair to do the same when it swings in the other direction." So for once, non-GAAP results showed a loss while GAAP earnings were positive.

Looking ahead, OLED screens are getting ready to make the jump from pocket-sized smartphone displays and into bigger, more profitable markets. Samsung is thinking about OLED tablets, LG Display (NYSE: LPL) wants to concentrate on OLED TV screens after cutting its teeth on Nokia's (NYSE: NOK) smartphones, and rumor has it that Sony (NYSE: SNE) wants to bring big-screen OLED TVs down to reasonable price levels. AU Optronics (NYSE: AUO) fills in with a fresh small-screen factory, though that project has been delayed until the third or fourth quarter of 2011.

Universal Display is happily working away at improved printing techniques for larger screens. You'll never think of "screen printing" the same way again once your TV comes off a supersized inkjet printer.

OLED technology has most definitely hit the hockey-stick stage of accelerated growth, and we're still in the early stages. Granted, the stock is priced for some heady growth numbers at 29 times sales and 32 times forward earnings, but sometimes you get exactly what you pay for. That's why we call Universal Display a Rule Breaker.

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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.