Higher Demand Lifted Tower Semiconductor Ltd. (TSEM) in Q3

Renaissance Investment Management, an investment management company, released its Q3 2025 “International Small Cap Equity Strategy” investor letter. A copy of the letter can be downloaded here. International equities posted their third consecutive quarter of positive returns, maintaining a successful trend and heading toward their best year since 2017. The portfolio posted positive returns in the quarter on a relative basis, outperforming the benchmark in the quarter. For more information on the fund’s best picks in 2025, please check its top five holdings.

In its third-quarter 2025 investor letter, Renaissance International Small Cap Equity Strategy highlighted stocks such as Tower Semiconductor Ltd. (NASDAQ:TSEM). Headquartered in Migdal Haemek, Israel, Tower Semiconductor Ltd. (NASDAQ:TSEM) is an independent semiconductor foundry. The one-month return for Tower Semiconductor Ltd. (NASDAQ:TSEM) was 16.52%, and its shares gained 152.70% over the last 52 weeks. On December 09, 2025, Tower Semiconductor Ltd. (NASDAQ:TSEM) stock closed at $124.00 per share, with a market capitalization of $13.903 billion.

Renaissance International Small Cap Equity Strategy stated the following regarding Tower Semiconductor Ltd. (NASDAQ:TSEM) in its third quarter 2025 investor letter:

"The top contributor to our portfolio performance 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’s decision to increase capacity in Silicon Photonics and Silicon Germanium is allowing the company to capitalize on the high demand for data centers and artificial intelligence."

Tower Semiconductor Ltd. (NASDAQ:TSEM) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 38 hedge fund portfolios held Tower Semiconductor Ltd. (NASDAQ:TSEM) at the end of the third quarter, up from 28 in the previous quarter. Tower Semiconductor Ltd. (NASDAQ:TSEM) reported revenue of $396 million in Q3 2025, resulting in net profit of $54 million. While we acknowledge the potential of Tower Semiconductor Ltd. (NASDAQ: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.

In another article, we covered Tower Semiconductor Ltd. (NASDAQ:TSEM) and shared the list of stocks beating the market with eye-popping gains. 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.