Here's Why InterDigital (IDCC) Rallied Over the Past Year

Investment management company First Pacific Advisors recently released its “FPA Queens Road Small Cap Value Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the third quarter, the fund returned 7.46% compared to a 12.60% return for the Russell 2000 Value Index. In the first three quarters of 2025, the Fund returned 13.77%, compared to 9.04% for the index. As the firm’s focus is on a diligent, disciplined, and patient process, it expects the fund to outperform in down markets and trail in speculative markets. Additionally, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its third-quarter 2025 investor letter, the FPA Queens Road Small Cap Value Fund highlighted stocks such as InterDigital, Inc. (NASDAQ: IDCC). InterDigital, Inc. (NASDAQ:IDCC) is a global research and development company that focuses on wireless, visual, artificial intelligence (AI), and related technologies. The one-month return of InterDigital, Inc. (NASDAQ:IDCC) was 15.30%, and its shares gained 69.03% of their value over the last 52 weeks. On November 21, 2025, InterDigital, Inc. (NASDAQ:IDCC) stock closed at $327.63 per share, with a market capitalization of $8.454 billion.

FPA Queens Road Small Cap Value Fund stated the following regarding InterDigital, Inc. (NASDAQ:IDCC) in its third quarter 2025 investor letter:

"InterDigital, Inc. (NASDAQ:IDCC) is a R&D organization that develops and acquires wireless communication and video patents. The company has a history of strong financial performance, opportunistically buys back shares, and pays a modest dividend. IDCC has been successfully renewing its wireless licensing agreements (Apple in 2022, Samsung in 2023) and has a growing stream of recurring licensing revenues across consumer electronics, internet of things (IoT), and automotive customers. 12 CEO Liren Chen joined in 2021 from Qualcom and has been hiring other former Qualcom managers. The company’s share price has increased over the past year on growing revenue, profitability, and buybacks. We began trimming the Fund’s position this year."

InterDigital, Inc. (NASDAQ:IDCC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 32 hedge fund portfolios held InterDigital, Inc. (NASDAQ:IDCC) at the end of the second quarter, the same as in the previous quarter. In the third quarter of 2025, InterDigital, Inc. (NASDAQ:IDCC) reported revenue of almost $590 million, marking a 49% year-over-year increase. While we acknowledge the potential of InterDigital, Inc. (NASDAQ:IDCC) 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 InterDigital, Inc. (NASDAQ:IDCC) and shared FPA Queens Road Small Cap Value Fund'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.