Therefore the Lord himself will give you this sign:
the virgin shall conceive and bear a son,
and shall name him Emmanuel.
As in my post on the prophecy of Balaam, this verse--notoriously among apologists for atheism--has a literal meaning as well as an allegorical meaning. The footnote to this verse in the New American Bible, the Bible approved for Catholic use by the U.S. Conference of Catholic Bishops, explains this more concisely than I can usually manage:
The sign proposed by Isaiah was concerned with the preservation of Judah in the midst of distress (cf Isaiah 7:15, 17), but more especially with the fulfillment of God's earlier promise to David (2 Sam 7:12-16) in the coming of Immanuel (meaning, "With us is God") as the ideal king (cf Isaiah 9:5-6; 11:1-5). The Church has always followed St. Matthew in seeing the transcendent fulfillment of this verse in Christ and his Virgin Mother. The prophet need not have known the full force latent in his own words; and some Catholic writers have sought a preliminary and partial fulfillment in the conception and birth of the future King Hezekiah, whose mother, at the time Isaiah spoke, would have been a young, unmarried woman (Hebrew, almah). The Holy Spirit was preparing, however, for another Nativity which alone could fulfill the divinely given terms of Immanuel's mission, and in which the perpetual virginity of the Mother of God was to fulfill also the words of this prophecy in the integral sense intended by the divine Wisdom.