TCW funds, an investment management company, released its “TCW Relative Value Mid Cap Fund” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. Equities finished the year on a positive note, with the S&P 500 Total Return (USD) increasing by 2.65% and achieving a remarkable 17.9% in 2025. The AI sector continued to thrive following Trump’s tariff announcements. While there are concerning indicators that echo the Dot-Com bubble, the underlying companies appear to be defying odds with technological advancements, strong financials, and reasonable valuations. Looking ahead, the firm anticipates the equity market will remain highly sensitive to policy changes and earnings reports, with valuations staying near historically high levels. Class I shares of the fund returned 4.54% in Q4, outperforming the Russell Midcap® Value Index benchmark, which returned 1.42%. In addition, please check the Fund’s top five holdings to know its best picks in 2025.
In its fourth quarter of 2025, TCW Relative Value Mid Cap Fund mentioned ON Semiconductor Corporation (NASDAQ:ON) as a new addition to its holdings. ON Semiconductor Corporation (NASDAQ:ON) is an American semiconductor company that provides intelligent sensing and power solutions to the automotive, industrial, aerospace and defense, medical, and communication industries. On April 6, 2026, ON Semiconductor Corporation (NASDAQ:ON) closed at $63.49 per share. One-month return of ON Semiconductor Corporation (NASDAQ:ON) was 6.54%, and its shares gained 98.72% over the past 52 weeks. ON Semiconductor Corporation (NASDAQ:ON) has a market capitalization of $25.55 billion.
TCW Relative Value Mid Cap Fund stated the following regarding ON Semiconductor Corporation (NASDAQ:ON) in its fourth quarter 2025 investor letter:
“ON Semiconductor Corporation (NASDAQ:ON) is a $23 billion market cap supplier of intelligent power and sensing solutions to the automotive, industrial, aerospace and defense, medical, and communication market. Over the last three months these markets experienced strong headwinds driven by macro and geopolitical trends complicated by excess inventory accumulated during the supply chain disruption triggered by the pandemic. Despite the strong headwinds, ON remained profitable and cash flow positive, as management focused on cost reduction and focusing of its product offering. There are indications that ON markets are stabilizing and the excess inventory is mostly depleted, and that current shipment is close to actual market demand after a period of under shipment. We expect improvement in ON financials as it benefits from the cost improvement steps implemented and the refocusing of its product offering. At initiation during the fourth quarter of 2025, shares of ON met two of the five valuation characteristics (price to cash flow, price to book).”
ON Semiconductor Corporation (NASDAQ:ON) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 63 hedge fund portfolios held ON Semiconductor Corporation (NASDAQ:ON) at the end of the fourth quarter, up from 45 in the previous quarter. While we acknowledge the risk and potential of ON Semiconductor Corporation (NASDAQ:ON) 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 ON Semiconductor Corporation (NASDAQ:ON) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered ON Semiconductor Corporation (NASDAQ:ON) and shared the list of most oversold semiconductor stocks to buy. 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.
