Semiconductor stocks are on a roll.
The SMH semiconductor ETF is on track for its third positive week in a row, adding more than 11% since a low on Aug. 23.
Gibbs Wealth Management's Erin Gibbs says those gains have overextended the semis trade.
"In the last month, the stock prices for the industry have gone up but earnings haven't, and you just see that being stretched, so I'd be a little more particular about which semis you get into," Gibbs said on CNBC's "Trading Nation" on Thursday.
Recent gains have taken the SMH ETF's price-to-earnings ratio up to 17.5 times forward earnings, a high not seen since July. That midyear peak was its highest multiple ever.
There is one stock that stands out to Gibbs as a buy, though.
"The one that I like is Micron Technology," said Gibbs. "Yes, the price has been going up, but it's the one stock that really has had a turnaround in its earnings expectations. ... There's just been a huge upward revision just in the last few weeks from multiple banks, so Wall Street definitely has a more positive outlook there."
Analysts have an average overweight rating and $49.40 price target on Micron, according to FactSet data. Micron moved above that price target this week.
J.C. O'Hara, chief market technician at MKM Partners, says the long-term trends in the semis space remain strong even with trade uncertainty causing choppiness.
"However, my one concern is over the short term," said O'Hara on CNBC's "Trading Nation" on Thursday. "We're pushing against critical resistance at $123. So, we have a long-term good setup, but short term we're overbought and at resistance. So I believe the best play right here is to be patient, to wait for a pullback, but to be buyers of a pullback because I think the long-term trends will ultimately break this ETF out to new highs."
The SMH ETF is less than 1% from touching $123. It last touched a record high of $123.56 on July 24.
