Aristotle Capital Management, LLC, an investment management company, released its “Value Equity Strategy” second quarter 2025 investor letter. A copy of the letter can be downloaded here. Although the U.S. equity market started with volatility in the second quarter, it rebounded with strength, with the S&P 500 Index rising 10.94% during the quarter. The composite returned 4.88% gross of fees (4.75% net of fees) in the first quarter, outperforming the 3.78% return of the Russell 1000 Value Index and underperforming the 10.94% return of the S&P 500 Index. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.
In its second quarter 2025 investor letter, Aristotle Capital Value Equity Strategy highlighted stocks such as Microchip Technology Incorporated (NASDAQ:MCHP). Microchip Technology Incorporated (NASDAQ:MCHP) manufactures and distributes smart, connected, and secure embedded control solutions. The one-month return of Microchip Technology Incorporated (NASDAQ:MCHP) was 5.11%, and its shares lost 13.06% of their value over the last 52 weeks. On July 22, 2025, Microchip Technology Incorporated (NASDAQ:MCHP) stock closed at $75.26 per share, with a market capitalization of $40.616 billion.
Aristotle Capital Value Equity Strategy stated the following regarding Microchip Technology Incorporated (NASDAQ:MCHP) in its second quarter 2025 investor letter:
“Microchip Technology Incorporated (NASDAQ:MCHP), the microcontroller (MCU) and analog semiconductor producer, was a top contributor for the quarter. After several quarters of underperformance driven by prolonged customer destocking, the company’s fundamentals began to improve meaningfully, as returning CEO Steve Sanghi’s turnaround plan is underway. Bookings showed signs of stabilization, supported by more balanced inventories across customers and distribution channels, as well as indications of recovering end-market demand. Operational execution also improved under the renewed leadership, with early benefits emerging from cost-saving initiatives—such as the closure of its Arizona wafer fabrication facility—and tighter inventory management. Microchip’s long-standing customer relationships and commitment to extended product lifecycles continue to support recurring revenue and reduce design-in risk. Combined with its consistent record of strong FREE cash flow generation and shareholder returns, this disciplined approach reinforces our conviction in the company’s ability to manage through industry cycles. Longer term, we believe Microchip remains well-positioned to gain share in 16- and 32-bit MCUs and areas including IoT, 5G infrastructure, autonomous vehicles and data centers.”
A semiconductor wafer at various stages of fabrication, showing the company’s range of expertise.
Microchip Technology Incorporated (NASDAQ:MCHP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 56 hedge fund portfolios held Microchip Technology Incorporated (NASDAQ:MCHP) at the end of the first quarter, which was 44 in the previous quarter. In the March quarter, Microchip Technology Incorporated (NASDAQ:MCHP) reported net sales of $970.5 million, which was down 5.4% sequentially. While we acknowledge the risk and potential of Microchip Technology Incorporated (NASDAQ:MCHP) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Microchip Technology Incorporated (NASDAQ:MCHP) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Microchip Technology Incorporated (NASDAQ:MCHP) and shared the list of best tech stocks to buy under $100. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
