Renaissance Investment Management, an investment management company, released its Q1 2025 “International Small Cap Equity Strategy” investor letter. A copy of the letter can be downloaded here. International equities began the year positively, recording strong gains despite increased geopolitical and tariff risks. Investors rotate away from US stocks due to concerns over the weakening US economy, which enabled international equities to achieve their best quarter. Decline in the U.S. Dollar Index offered additional support to international equities. However, the portfolio returns were negative on both an absolute basis and relative to the benchmark in the first quarter. For more information on the fund’s best picks in 2025, please check its top five holdings.
In its first-quarter 2025 investor letter, Renaissance International Small Cap Equity Strategy highlighted stocks such as Tower Semiconductor Ltd. (NASDAQ:TSEM). Tower Semiconductor Ltd. (NASDAQ:TSEM) is a semiconductor foundry that offers technology and process platforms for integrated circuits. The one-month return of Tower Semiconductor Ltd. (NASDAQ:TSEM) was -2.16%, and its shares gained 1.94% of their value over the last 52 weeks. On June 18, 2025, Tower Semiconductor Ltd. (NASDAQ:TSEM) stock closed at $39.88 per share, with a market capitalization of $4.56 billion.
Renaissance International Small Cap Equity Strategy stated the following regarding Tower Semiconductor Ltd. (NASDAQ:TSEM) in its Q1 2025 investor letter:
“Our weakest performer during the quarter was Tower Semiconductor Ltd. (NASDAQ:TSEM) (Israel), an owner of semiconductor foundries in the U.S., Israel, Japan, and Italy. The company is growing capacity for AI products such as Silicon Photonics and Silicon Germanium, but the release of DeepSeek’s AI model caused investors to become concerned that growth of these products could be slower-than-expected.”
A close-up of a modern semiconductor chip, intricately wired and gold plated.
Tower Semiconductor Ltd. (NASDAQ:TSEM) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 22 hedge fund portfolios held Tower Semiconductor Ltd. (NASDAQ:TSEM) at the end of the first quarter, which was 36 in the previous quarter. Tower Semiconductor Ltd.’s (NASDAQ:TSEM) reported first quarter revenue of $358 million representing a $31 million or 9% year-over-year increase. While we acknowledge the potential of Tower Semiconductor Ltd. (NASDAQ:TSEM) 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 Tower Semiconductor Ltd. (NASDAQ:TSEM) and shared the list of top AI news updates taking Wall Street by storm. 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 TSEM 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.
