Semtech Corporation (SMTC) Rose as Earnings Beat Expectations

Fred Alger Management, an investment management company, released its “Alger Weatherbie Specialized Growth Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. Equity markets continued their upward trajectory in the quarter, with the S&P 500 Index surging 8.12%. Class A shares of the fund underperformed the Russell 2500 Growth Index during the third quarter of 2025. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Alger Weatherbie Specialized Growth Fund highlighted stocks such as Semtech Corporation (NASDAQ:SMTC). Semtech Corporation (NASDAQ:SMTC) offers semiconductor, Internet of Things systems, and cloud connectivity service solutions. The one-month return of Semtech Corporation (NASDAQ:SMTC) was -1.41%, and its shares gained 47.49% of their value over the last 52 weeks. On October 28, 2025, Semtech Corporation (NASDAQ:SMTC) stock closed at $70.44 per share, with a market capitalization of $6.112 billion.

Alger Weatherbie Specialized Growth Fund stated the following regarding Semtech Corporation (NASDAQ:SMTC) in its third quarter 2025 investor letter:

"Semtech Corporation (NASDAQ:SMTC) designs semiconductors and connectivity solutions that enable high-speed data transfer in data centers and connect devices across industrial and consumer markets. Its portfolio includes protection products, signal integrity solutions, and wireless sensing technologies, along with advanced interconnect offerings like FiberEdge and CopperEdge. During the quarter, shares contributed positively to performance after the company reported fiscal second-quarter earnings that beat analyst estimates. Management highlighted strong traction for its newest data-center connectivity products, continued engagement with large customers, and progress streamlining operations and strengthening the balance sheet."

Semtech Corporation (NASDAQ:SMTC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 37 hedge fund portfolios held Semtech Corporation (NASDAQ:SMTC) at the end of the second quarter, compared to 40 in the previous quarter.  While we acknowledge the potential of Semtech Corporation (NASDAQ:SMTC) 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.

In another article, we covered Semtech Corporation (NASDAQ:SMTC) and shared the list of worst performing data center stocks in 2025. 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.