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The Rise of IPTV

AT&T isn't the only company enjoying the slow death of cable and the rise of internet television. Further up the assembly line, Sigma Designs should fetch a hefty chunk of the $5 billion AT&T plans to spend on its new TV service U-verse, Cramer said.

One of Sigma's four businesses is making the processors that support the video behind IPTV, or internet protocol television. So if AT&T lands the 30 million customers it's expecting, there should be some nice growth ahead for Sigma.

Not that Sigma isn't doing great already. Last quarter, it blew away expectations, earning 79 cents a share when the Street expected only 24 cents. Revenues were up 164% year-over-year, and the company raised guidance. After the report, Think Equity boosted its price target for the stock to $100 from $62.

The biggest problem Sigma has right now is that the company doesn't have the production capacity to meet the demand for its products. But that just means Sigma will have pricing power in the future.

But as good as the stock sounds, don't rush to your broker just yet, Cramer said. Both Broadcom and STMicroelectronics are expected to announce their intentions to compete with Sigma in the market where it's the only player right now. Wait until this happens, at the upcoming Consumer Electronics Show, because it should cause a dip in SIGM, giving Homegamers an entry point.

Questions for Cramer? madmoney@cnbc.com

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