Is Atheros (NASDAQ:ATHR) becoming a household name?

The small-cap chip designer is on a roll these days, landing high-profile deals left and right and coming back strong from last year's market meltdown.

  • The Atheros Wi-Fi chip inside the new Microsoft (NASDAQ:MSFT) Zune HD is a selling point because of its combination of low power draw and enhanced Wi-Fi performance.
  • Just when you wanted to call the Wi-Fi Alliance the Google (NASDAQ:GOOG) of hardware specifications for keeping products indefinitely in beta, the high-speed 802.11n technology on which Atheros builds much of its current business gained a new level of marketability by nailing down a final specification after years of unofficial "draft" products. Atheros is among the first companies to get the much-vaunted non-draft certification alongside much larger players Intel (NASDAQ:INTC), Broadcom (NASDAQ:BRCM), and Marvell (NASDAQ:MRVL).
  • An 802.11n chip targeted at low-cost markets like netbooks and consumer electronics applications is breaking sales records for Atheros with more than 10 million units sold.

Most of the news above didn't affect the just-completed third quarter much, but the upcoming Windows 7 launch and generally refreshed consumer appetite for computers and networked gadgets pushed Atheros to impressive heights regardless. Sales of $156.6 million were an increase of 40% over the previous quarter and 13% over 2008 levels. That's right -- Atheros came out positive in a post-crash to pre-crash sales comparison.

GAAP earnings jumped from $0.16 per share a year ago to $0.60 per share today, but much of that boost came from settling a foreign tax dispute in Atheros' favor (collect $200!). Pro forma earnings, which for once give a truer picture of how Atheros' business is doing, stopped at $0.46 per share, up from $0.37 per share a year ago and $0.20 per share in the second quarter. Any way you slice it, Atheros was impressive. And as you saw earlier, there are several potential catalysts lined up to ensure that the growth momentum won't putter out anytime soon.

With a $1.7 billion market cap and plenty of juice left in those rocket boosters, Atheros seems destined to make the leap from small, obscure, and ignored to household name and mid-cap stock. Of more than 1,500 CAPS members with an interest in Atheros, 97% believe that the stock will continue to crush the market. Grab a 100% free CAPS account and cast your vote today.

CAPS All-Star and Fool contributor Anders Bylund owns shares in Google, but he holds no other position in any of the companies discussed here. Google is a Motley Fool Rule Breakers pick. Intel and Microsoft are Motley Fool Inside Value recommendations. Atheros Communications is a Motley Fool Hidden Gems pick. The Fool owns shares of Atheros Communications. 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.