L1 Capital, an investment management firm, released its “L1 Capital International Fund” (unhedged) fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. The Strategy focuses on investing in high-quality companies with favorable cashflow-based valuations. The letter highlighted the current investment environment, the Fund’s positioning, portfolio adjustments, and the quarterly (December) and yearly (2025) review. The firm considers valuation analysis essential for potential AI-focused investments; merely having conviction in AI isn’t enough to ensure a successful investment outcome. In general, 2025 was a strong year for all stock markets globally. The fund returned 2.2%, net of fees, compared to 2.5% for the benchmark (MSCI World Net Total Return Index in AUD). For the year, the fund returned 9.8% (net of fees) compared to 12.4% for the Index. In addition, you can check the Strategy’s top five holdings to know its best picks in 2025.
In its fourth-quarter 2025 investor letter, L1 Capital International Fund highlighted stocks such as Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM). Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) manufactures, packages, tests, and sells integrated circuits and other semiconductor devices. The one-month return for Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) was 14.90%, and its shares gained 52.29% over the last 52 weeks. On January 14, 2026, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) stock closed at $327.11 per share, with a market capitalization of $1.4 trillion.
L1 Capital International Fund stated the following regarding Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its fourth quarter 2025 investor letter:
“Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is the leading manufacturer of semiconductor chips used in AI, mobile phone and other applications. TSMC continues to benefit from extremely strong demand conditions and industry-leading manufacturing capabilities. Capacity has been expanded domestically in Taiwan, as well as large investments in manufacturing in the U.S. and other international markets. Financial performance continues to exceed base case expectations, and we believe the business has a long runway for future growth. Following substantial share price outperformance, TSMC is trading within our assessed fair value range but remains a top 10 holding.”
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is in 9th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 194 hedge fund portfolios held Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) at the end of the third quarter, compared to 187 in the previous quarter. In the third quarter of 2025, Taiwan Semiconductor Manufacturing Company Limited’s (NYSE:TSM) revenue increased 6% sequentially in NT. While we acknowledge the risk and potential of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) 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 Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) and shared the list of best long term growth stocks to buy according to hedge funds. Mar Vista U.S. Quality Strategy also cited the same reason for Taiwan Semiconductor Manufacturing Company Limited’s (NYSE:TSM) surge in its Q4 2025 investor letter. In addition, please check out our hedge fund investor letters Q4 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.
