Semiconductor Speculation

A couple of weeks ago, Cramer recommended a few speculative technology names on the premise that these smaller stocks would lead the next leg of the tech rally. Sure, Cramer still liked Apple , Amazon , Google and Research in Motion , but he thought companies like ON Semiconductor would offer greater returns.

He’s been right. This basket of stocks, which includes Brocade Communications Systems, Starent Networks , Cadence Design Systems , Tekelec and ON Semi, is up 6% since Cramer’s call. Over the same period, the S&P 500 has slipped 2% and the Nasdaq is down 4%. ON Semi, in particular, is up 9% since its May 7 appearance on Mad Money, and there might be more upside to come.

Why? Because Analog Devices , which operates in some of the same areas as ON, reported great earnings this week, and that sent the stock higher. This isn’t mere speculation, though. ON has the business fundamentals to justify the risk. The company is leaving commodity components for specialized chips, inventories are normalizing, and a backlog that covers about 80% of next quarter’s expected revenues provides great earnings visibility. There is a strong bullish case for owning this stock outright.

Cramer wanted to be sure, though, so he invited ON Semi CEO Keith Jackson to the show. Watch the video for an insider’s look at the company, and decide for yourself if ONNN is a buy.

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    Jim Cramer is host of CNBC's "Mad Money" and co-anchor of the 9 a.m. ET hour of CNBC's "Squawk on the Street."

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