Why One Fund Made a $59 Million Bet on Semtech Stock as Shares Surge to Multi-Year Highs
Key Points
San Francisco-based Think Investments purchased 820,400 shares in SMTC, valued at about $58.6 million, in the third quarter.
The transaction represented 7.8% of the fund’s reportable assets under management (AUM) at quarter-end, making it the fund's fourth-largest holding.
The move marked a new position for Think Investments, which did not report holding Semtech shares in the prior period.
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San Francisco-based Think Investments initiated a new position in Semtech Corporation (NASDAQ:SMTC), adding 820,400 shares for an estimated $58.6 million in the third quarter, according to a November 14 SEC filing.
What Happened
According to a filing with the Securities and Exchange Commission dated November 14, Think Investments LP disclosed a new position in Semtech Corporation, acquiring 820,400 shares valued at $58.6 million as of September 30. This addition brought the fund’s total number of reportable positions to 20 for the quarter.
What Else to Know
The new position represents about 7.8% of Think Investments' 13F reportable AUM.
Top holdings after the filing:
- NYSE:RDDT: $76.4 million (10.1% of AUM)
- NASDAQ:AMZN: $71.4 million (9.4% of AUM)
- NASDAQ:TASK: $66.7 million (8.8% of AUM)
- NASDAQ:SMTC: $58.6 million (7.7% of AUM)
- NASDAQ:TTMI: $45.7 million (6% of AUM)
As of Wednesday's market close, SMTC shares were priced at $73.45, up 16.5% over the past year and outperforming the S&P 500's 13% gain in the same period.
Company Overview
| Metric | Value |
|---|---|
| Price (as of market close Wednesday) | $73.45 |
| Market Capitalization | $6.8 billion |
| Revenue (TTM) | $1 billion |
| Net Income (TTM) | $28.6 million |
Company Snapshot
Semtech Corporation is a leading provider of high-performance analog and mixed-signal semiconductors, with a focus on signal integrity, protection, wireless connectivity, and power management technologies. The company generates revenue through the design, development, and sale of integrated circuits and advanced algorithms for enterprise computing, communications, and industrial applications.
Semtech leverages its broad product portfolio and engineering expertise to address the needs of data centers, enterprise networks, industrial automation, and consumer electronics. Strategic emphasis on innovation and diversified end-markets supports its competitive positioning in the global semiconductor industry.
Foolish Take
A new Semtech position of this size signals conviction in a recovery story that’s still unfolding. After two turbulent years marked by restructuring, divestitures, and a materially changed margin profile, Semtech has begun stabilizing its core business while benefiting from early traction in next-cycle demand for data-center, IoT, and advanced connectivity products. With shares now approaching 2021 levels despite continued volatility, the position adds meaningful tech exposure to Think’s portfolio, which remains otherwise dominated by high-growth consumer and software names.
According to the fund’s latest Form 13F, Think Investments added 820,400 Semtech shares in the third quarter—a 7.8% portfolio weight that makes Semtech the fund’s fourth-largest position. The company's most recent quarterly results show net sales of $267 million and a GAAP gross margin of 51.9%. Management noted in the release that the quarter's strong growth reflected returns on the firm's disciplined R&D investments and expanding customer partnerships as power constraints intensified.
For long-term investors, the combination of improving fundamentals, a leaner cost structure, and exposure to structural semiconductor demand drivers may justify Think’s sizable allocation—though execution and sector cyclicality remain key risks to monitor.
Glossary
13F reportable position: An investment holding that institutional managers must disclose quarterly to the SEC if above certain thresholds.
Assets Under Management (AUM): The total market value of investments managed on behalf of clients by a fund or firm.
Trailing twelve months (TTM): The 12-month period ending with the most recent quarterly report.
Analog and mixed-signal semiconductor: Chips that process both continuous (analog) and digital signals for electronic devices.
Signal integrity: The quality and reliability of electrical signals as they travel through circuits or systems.
Power management solutions: Technologies designed to efficiently control and distribute electrical power within electronic devices.
Integrated circuits: Miniaturized electronic circuits placed on a single chip, used in most modern electronic devices.
Original equipment manufacturers (OEMs): Companies that produce components or products used in another company's end products.
End-markets: The final industries or sectors where a company's products are sold and used.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool recommends Reddit and TaskUs. The Motley Fool has a disclosure policy.
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