Skyworks and Apple upgraded together, but one expert says you can separate the two
Skyworks , like the rest of the semiconductors, has had a volatile few months, rising and falling on news about U.S.-China trade tensions and Huawei's blacklisting. But its ties to something more stable — Apple , one of its customers — could send it higher, according to one Wall Street firm.

Raymond James thinks the two stocks will go up together: it upgraded both to outperform ratings on Thursday, predicting that Apple will successfully roll out a 5G iPhone in 2020. While the concept of 5G networks remains a buzzword for most people, Raymond James thinks it will prove appealing to customers, especially because of the better connectivity.

The call resonated with Steve Weiss of Short Hills Capital Partners, who has called Skyworks one of his "5G plays" for many months and who has seen the stock go up 12% after adding to his exisiting position on June 13. He reiterated that reasoning on Thursday's "Halftime Report": "I think 5G is the place to be. It's the one theme in technology you definitely go, like cloud was a few years ago. That's why I own [Skyworks]."

Weiss also agrees with Raymond James' argument that "most of what could go wrong for Skyworks has already happened." In particular, he pointed out, "They've already preannounced [earnings] based on their exposure to Huawei. So I think that's out of there. The management of the company would have to be pretty...stupid to really miss a quarter after they preannounced."

Despite his confidence in Skyworks' earnings, however, Weiss advises investors not to get into the stock right now. "One reason why I wouldn't buy it this quarter [is] because Apple sales, I believe, will be disappointing."

That's where Weiss diverges from the Raymond James analyst, who acknowledges that this year's iPhone cycle is likely to be the weakest in years but predicts that the two companies will go up together in the long term. Weiss, on the other hand, believes in the Skyworks story more than the Apple one. He owns both stocks, but also owns shorter-term puts in Apple.

Weiss' biggest position in the space is SMH , the semiconductors ETF, which he believes is less risky than individual names. The traders are split on this one, though — while Weiss is happy holding, Joe Terranova of Virtus Investment Partners just sold the ETF.

SMH has gone up 17% since Terranova bought it last month. Why is he selling now? "I wanted the diversification of an ETF [when I bought it]… Now I want that capital because we've got technology companies individually reporting… I want the capital to allocate towards good fundamental earnings stories in individual stocks that I'm going to hear about over the next couple weeks." He is keeping an eye out on the FAANGs in particular, none of which he currently owns.

Three of the FAANG stocks are reporting next week: Facebook on Wednesday, and Alphabet and Amazon next Thursday. Apple will report earnings on July 30.



Disclosure: Stephen Weiss owns shares of Apple, Skyworks Solutions Inc and Vaneck Vectors/Semiconductor ETF. He also owns puts in Apple.