Fred Alger Management, an investment management company, released its “Alger Weatherbie Specialized Growth Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. U.S. equities experienced increased volatility in the first quarter due to changing fiscal, monetary, and trade policies. Uncertainty arose from the emergence of advanced AI models from China. Against this backdrop, Class A shares of the fund underperformed the Russell 2500 Growth Index in the quarter. The Consumer Discretionary and Industrials sectors contributed to the fund’s performance in the quarter, while Health Care and Information Technology detracted. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its first-quarter 2025 investor letter, Alger Weatherbie Specialized Growth Fund highlighted stocks such as Semtech Corporation (NASDAQ:SMTC). Semtech Corporation (NASDAQ:SMTC) manufactures and distributes analog and mixed-signal semiconductor products and advanced algorithms. The one-month return of Semtech Corporation (NASDAQ:SMTC) was 2.24%, and its shares gained 36.37% of their value over the last 52 weeks. On June 17, 2025, Semtech Corporation (NASDAQ:SMTC) stock closed at $40.23 per share, with a market capitalization of $3.485 billion.
Alger Weatherbie Specialized Growth Fund stated the following regarding Semtech Corporation (NASDAQ:SMTC) in its Q1 2025 investor letter:
“Semtech Corporation (NASDAQ:SMTC) designs and manufactures analog and mixed-signal semiconductors for a wide range of applications, including Internet of Things (IoT), data centers, industrial equipment, and consumer electronics. The company is a global leader in low-power, high-performance solutions, with a focus on enabling connectivity, energy efficiency, and miniaturization across its target markets. Semtech operates in three business segments: Protection, Signal Integrity, and Wireless & Sensing. In February 2025, the company lowered revenue projections for its core data center product, Advanced Copper Cable (ACC), which connects GPUs at a lower power consumption while preserving signal integrity. Management attributed the revised guidance to architectural changes in GPUs from a major supplier, rather than issues with Semtech’s product or execution. Consequently, shares declined due to delayed ACC revenues, negatively impacting performance during the quarter.”
A technician looking at a circuit board of analog semiconductor products.
Semtech Corporation (NASDAQ:SMTC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 40 hedge fund portfolios held Semtech Corporation (NASDAQ:SMTC) at the end of the first quarter, which was 57 in the previous quarter. Semtech Corporation (NASDAQ:SMTC) reported record net sales of $251.1 million in the fiscal first quarter of 2026, up 22% year-over-year. While we acknowledge the potential of Semtech Corporation (NASDAQ:SMTC) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.
In another article, we covered Semtech Corporation (NASDAQ:SMTC) and shared the latest analyst views on Coatue’s favorite AI stocks. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of SMTC as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
