Will Nova Ltd. (NVMI) Benefit from Increasing Use of AI?

Wasatch Global Investors, an asset management company, released its third-quarter 2025 “Wasatch Small Cap Growth Strategy” investor letter. A copy of the letter can be downloaded here. US small-cap equities rallied strongly in the third quarter. The Fed Reserve’s interest rate cut supported the rally. However, the fund-Investor Class struggled to keep up with the rally and ended the period down -3.17% vs. 12.19% gain for the Russell 2000 Growth Index. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Wasatch Small Cap Growth Strategy highlighted stocks such as Nova Ltd. (NASDAQ:NVMI). Nova Ltd. (NASDAQ:NVMI) designs and develops process control systems used to manufacture semiconductors. The one-month return of Nova Ltd. (NASDAQ:NVMI) was 10.13%, and its shares gained 65.87% of their value over the last 52 weeks. On December 12, 2025, Nova Ltd. (NASDAQ:NVMI) stock closed at $315.84 per share, with a market capitalization of $9.365 billion.

Wasatch Small Cap Growth Strategy stated the following regarding Nova Ltd. (NASDAQ:NVMI) in its third quarter 2025 investor letter:

“Nova Ltd. (NASDAQ:NVMI) also contributed. Nova sells metrology and process control systems used in semiconductor manufacturing. Like Fabrinet, the firm benefits from the increasing use of AI, and its ties to the AI theme likely helped lift the stock during the quarter. But here too, we aren’t investing in Nova as part of a thematic view, and we don’t view it as a speculative business. The company has a strong track record of earnings growth, in our view, and we believe its products will continue to be in high demand as semiconductor manufacturing becomes more complex. (Current and future holdings are subject to change and risk.)”

Is Nova Ltd. (NVMI) the Best Semiconductor Equipment Stock to Buy According to Analysts?

Nova Ltd. (NASDAQ:NVMI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 18 hedge fund portfolios held Nova Ltd. (NASDAQ:NVMI) at the end of the third quarter, which was 22 in the previous quarter. Nova Ltd.’s (NASDAQ:NVMI) total revenues in Q3 2025 hit a record $224.6 million, marking a strong 25% year-over-year growth. While we acknowledge the risk and potential of Nova Ltd. (NASDAQ:NVMI) 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 Nova Ltd. (NASDAQ:NVMI) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Nova Ltd. (NASDAQ:NVMI) and shared Wasatch Small Cap Growth Strategy’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q3 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.