Growth funds love semiconductor leadership. When they see the National Semiconductors (NSM) and the Texas Instruments (TXN) or the Advanced Micro Devices (AMD), Microns (MU) and Teradynes (TER), as well as the twins of semi growth, Altera (ALTR) and Xilinx (XLNX), rolling up, they get excited to take a lot of stocks that are affiliated with the group.

I’m bullish on Novellus (NVLS) and Teradyne (TER) as plays on increased demand for semiconductors, adds Joe Terranova.

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I don't believe in any of the semi equipment stocks, with the exception of Teradyne (TER), because that's too cheap.

Teradyne (TER) was upgraded from Neutral to Buy at Piper Jaffray. $16 price target. Stock is already pricing in a temporary weakening of business. Expect recovery by the fourth quarter.

From a recent Mad Money show:

"No, I don't like that group. Wall Street is always excited about that group, but Wall Street is WRONG!"

Chip testing equipment maker Teradyne Inc. said last week that its board authorized the repurchase of up to $400 million worth of common stock.

The stock trades for 13x cash flow.

Teradyne (TER) was upgraded from Hold to Buy, Citigroup said. $17 price target. Most test assembly subcontractors ar expecting a 5% to 10% year-over-year CapEx increase for 2008. Fundamentals and valuation are both at trough levels.

UPGRADED TO OVERWEIGHT

UPGRADED TO OVERWEIGHT