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Chip stocks outperform: time to double down?

Tech is on a tear. Up 9.5%, it's the best performing sector quarter-to-date.

That's in large part thanks to one sub-sector -- the semiconductors.

Chip stocks have had an incredible run recently. Nvidia is up 106% over the past year, and ARM Holdings and Applied Materials are both up 47% year-to-date, to name just a few.

But given the chip-stocks' rapid rise, has all the good news and positive sentiment already been priced in? Is now the time to take profits?

The "Halftime Report" experts debated if these stocks still have room to run.

Joe Terranova notes that in addition to some strong earnings, chip stocks have been lifted by the recovery in emerging markets -- especially in Asia.

The semiconductor rally was driven "by the domestic demand initially, but now you have global participation...and that provides continued tailwinds in the space," he said.

Like Terranova, Pete Najarian believes the chip stocks still have room to run.

He thinks the consolidation that's happened within the space has been a positive, and he also believes that untapped value will be unlocked as the traditional chip-makers adapt their products and business models to better serve the modern consumer. Intel, for instance, is doing "all the right things."

Jim Lebenthal agrees that there are opportunities within the space, but he believes investors should be selective when choosing which chip stocks to buy.

At the top of Lebenthal's list are companies that make specialized chips in areas with lots of growth potential.

"I think in the chip sector you have to make distinctions...I'd like to be in the more specialty manufacturers like Nvidia....or Qualcomm, which is gaining its footing and certainly has more room to run as the iPhone 7 comes out."

Trader disclosure: On August 18, 2016 the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Halftime Report" were owned by the "Halftime Report" traders:

Pete Najarian: Long Stock: AAPL, BAC, BMY, CSCO, DIS, DISCA, GE, KMI.A, KMI, KO, LUX, MRK, PEP, PFE, TGT, VIAB Long Calls: AAL, ABT, AKS, BSX, BZH, CHK, CIT, CNX, COP, CSCO, DAL, DISH, DVN, EGO, ETP, FSLR, FXI, GLD, GT, HALO, HOG, INTC, KGC, KMI, KO,LLY, MRO, MT, MU, NEM, P, PG, PSX, RTN, SLV, SLW, TGT, TMUS, TWTR, UA, VLO,XLE, YELP. Puts: CS, EEM, MBLY, NLY, XOM

Jon Najarian: LongStock: CSX, XON. Long Calls: AAPL, CSX, DLPH, GLD, GPRO, HFC, HOLX, IP, KATE, LVS, MRO, MSFT, PAAS, SLW, TASR, TWTR, WYNN, VLO, XON

Jim Lebenthal: Long AAPL, BA, C, CSCO, DCO, DIS, EEQ, GM, INTC, JCP, KMI, KMY, MPC, ORBC, PFE, QCOM, QRVO, SPLS, TIF, TRN, TWX, WGO

Joe Terranova: Long VRTS