Aggressive Growth Stock Strategist Brian Bolan takes a look at a couple of semiconductor stocks.

Near the close of the day on Friday, March 27, there was a report that INTC was looking at buying ALTR, and that sent shares of many semiconductor stocks higher. Brian Bolan, the Aggressive Growth Stock Strategist for Zacks Investment Research, discusses two semiconductor stocks with Terry Ruffolo. The first  is Cypress Semiconductor (CY - Analyst Report), a Zacks Rank #1 (Strong Buy) that is in the middle of digesting a deal of its own. Brian notes that the company is merging with Spansion, and that could have ignited the sector rotation we are seeing in the space. CY has a great history of beating the number, topping the Zacks Consensus Estimate in 9 of the last 10 quarters. Brian discusses the valuation a little, noting the forward PE of 45x is a little high, but growth investors tend to pay up for stocks like this.

The next stock is Neophotonics (NPTN - Snapshot Report) and Terry Ruffolo notes right off the bat that this is a small cap stock. Small cap tech stocks tend to be rather volatile and NPTN is no exception to that. Brian Bolan points out that the company has topped the Zacks Consensus Estimate in each of the last three quarter and the last two were not only big beats, but the company became profitable as well. Terry nodded in agreement that investors would rather own stocks that make money as opposed to those that have negative earnings, and it was pointed out on the chart that the stock soared after most recent large beat and profitable quarter for the company. Brian did note that the 83x forward multiple is rather rich, but Terry gave Brian the chance to tell us how that multiple could come down over time.