I believe Isa 7 contains a prophecy that was given and fulfilled during Ahaz's lifetime, that a young woman would conceive, and call the child Immanuel. I do not believe the prophecy when given, or primary fulfillment, was about a "virgin" - or else there was a virgin birth other that Christ's! But I also believe that Matthew, under the inspiration of the Holy Spirit and using Midrashic hermeneutic principles, found "fulfillment" of this passage in Christ: even a "better" fulfillment, by pointing out that Mary was more than a "young woman", she was a "virgin" as well! But demanding "virgin" in Isa 7:14, although seemingly making a stronger case for Christ (according to modern, gentile thinking), breaks in the context of the entire chapter and the primary fulfillment of the prophecy.
This is a Jewish hermeneutic known as Midrash, and was a completely valid approach to interpreting and applying scripture in Matthew's day, even though it seems strange in our day. Basically, the concept is that Jesus is so amazing, he not only fulfilled prophecies directly about him, he also "fulfilled" prophecies and events that were about someone/something else.
For example, in Matt 2:15 Matthew finds "fulfillment" in "Out of Egypt have I called my son" - yet this is from Hos 11:1, the context being Israel leaving Egypt in the past, not Jesus leaving Egypt in the future. Another example is in 2:23 where Matthew says "that it might be fulfilled which was spoken by the prophets, He shall be called a Nazarene." One of the Midrashic rules was that words with similar sounds could be connected. This prophecy, in western, gentile thinking, cannot be found in the OT. But once one understands how Matthew is applying Midrash, it doesn't take long to find the prophecy in Isa 11:1 - the word translated "Branch" in the KJV is "netser" which sounds like "nazarene". Midrash allows Matthew to make these connections to build a stronger case for Christ according to Jewish rules of interpretation. Also examine Matt 2:17-18, which is from Jer 31:15, and original context is nothing about the events in Matt 2 because the next verse indicates Ramah was weeping because the children were taken and held in the land of the enemy (but would return). Again, Matthew under inspiration applies Midrashic interpretation techniques to show how "fulfillment" is found in Christ's life.