Do You Believe in the Long-Term Growth Prospects of InterDigital (IDCC)?

Investment management company First Pacific Advisors recently released its “FPA Queens Road Small Cap Value Fund” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. The Fund returned -0.36% in Q4 2025, compared to the Russell 2000 Value Index’s 3.26%. In 2025, the Fund has returned 13.36% compared to 12.59% gain for the Index. The Fund outperformed in the first half of 2025, when markets were weak and volatile. However, in the second half of 2025, markets favored speculative and low-quality stocks, leading to the Fund’s underperformance. The portfolio is designed to protect clients from market drawdowns by focusing on quality and value. Please review the Fund’s top five holdings to gain insights into their key selections for 2025.

In its fourth-quarter 2025 investor letter, FPA Queens Road Small Cap Value Fund highlighted stocks like InterDigital, Inc. (NASDAQ: IDCC). InterDigital, Inc. (NASDAQ:IDCC) is a leading technology research and development company specialized on wireless, visual, artificial intelligence (AI), and related technologies. On February 12, 2026, InterDigital, Inc. (NASDAQ:IDCC) stock closed at $356.83 per share. One-month return of InterDigital, Inc. (NASDAQ:IDCC) was 15.57%, and its shares are up 66.52% over the past twelve months. InterDigital, Inc. (NASDAQ:IDCC) has a market capitalization of $9.186 billion.

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

"InterDigital, Inc. (NASDAQ:IDCC) We believe Fabrinet will be a 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. InterDigital 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. CEO Liren Chen joined the company in 2021 from Qualcomm and has been hiring other former Qualcomm managers. The company’s share price has increased over the past year due to growing revenue, profitability, and buybacks. We like the company’s long term prospects but began trimming the Fund’s position this year on valuation."

InterDigital, Inc. (NASDAQ:IDCC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 35 hedge fund portfolios held InterDigital, Inc. (NASDAQ:IDCC) at the end of the third quarter, up from 32 in the previous quarter. InterDigital, Inc. (NASDAQ:IDCC) reported revenue of $158 million in the fourth quarter of 2025, surpassing the upper end of guidance range. 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 a list of soaring stocks. 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.