The semiconductor trade: 4 stocks to watch

Applied Materials' earnings beat Thursday may provide a reason to buy into the battered semiconductor space, CNBC "Fast Money" trader Brian Kelly said.

The company—which makes technology used to manufacture chips—beat Wall Street's earnings expectations as total orders rose 11 percent year-over-year. Shares rose 2.5 percent in extended trading to more than $20 per share.

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"I would be a buyer of Applied Materials here," Kelly said.

Broadcom Corp. signage is displayed outside of the company's headquarters in Irvine, California.
Patrick Fallon | Bloomberg | Getty Images
Broadcom Corp. signage is displayed outside of the company's headquarters in Irvine, California.

Big-name stocks in the sector, including Qualcomm and Micron, have suffered this year. Trader Jon Najarian looked to stocks that have performed well while some peers struggled.

He pointed to Broadcom, which he called a "monster" as it has climbed more than 50 percent in the last year. Najarian also liked Maxim Integrated Products, which has climbed 7 percent this year.

Maxim jumped more than 4 percent Thursday on reports that Avago has shown interest in buying it.

NXP Semiconductors also looks to have upside despite an "incredible rise," said trader Steve Grasso. The company—which has a hand in credit card system components—has soared 34 percent higher this year.

Disclosures:

Jon Najarian

Jon Najarian is long AEP, BBY, CS, CSLT, EXXI, FEYE, GE, HFC, HSBC, HUN, HZNP, JWN, MAS, MCD, MDRX, MRVL, MW, NEE, NRG, NUGT, OAS, OC, PG, PVA, RHT, RRC, RYL, SCTY, SIMO, SIRI, SKX, SOL, SYK, TAP, TEVA, TTWO, TLT, VIX, WMB, UPS, XLI, YPF and ZIOP. He is long calls AKS, BBY, CTXS, EQT, EWJ, FB, GE, GREK, GRPN, GSK, GTI, IDTI, JWN, LNKD, MCD, MDRX, MT, MYL, NTAP, NUAN, OAS, PG, PPC, PRU, RAD, SAP, SIMO, SKX, SNDK, TAP, UPS, VALE, WFM and XLK. He is long LOCO puts. Today, he bought AEP, JWN, NUGT, UPS, JWN calls MT calls, UPS calls and LOCO puts.

Steve Grasso

Steve Grasso is long AAPL, BAC, BTU, DD, EVGN, MJNA, PFE, T, TWTR and GDX. His firm is long MCD, AXP, IBM, KO, TWTR and ZNGA. His kids own EFG, EFA, EWJ, IJR and SPY.

Karen Finerman

Karen is long BABA, BAC, C, FINL, FL, GOOG, GOOGL, JPM, M and KORS. She is short SPY. Her firm is long AAPL, ANTM, BAC, C, DIS, FBT, FINL, FL, GOOG, GOOGL, GPS, IBB, JPM, M, KORS, SUNE, URI and XBI. Her firm is short IWM, SPY, MDY. Karen Finerman is on the board of GrafTech International.

Brian Kelly

Brian Kelly is long DXGE, BTC=, BBRY, SPY puts and U.S. dollar. He is short Australian dollar, euro, yen and yuan. Today, he bought DXGE and sold short euro.