10 Best Data Storage Stocks To Buy According to Hedge Funds

6. Silicon Motion Technology Corp. (NASDAQ:SIMO)

Number of Hedge Fund Holders: 34

Silicon Motion Technology Corp. (NASDAQ:SIMO) is a leading provider of NAND flash controllers for a wide range of solid-state storage devices, including SSDs for PCs, data centers, and mobile devices. Its customer base includes NAND flash makers, module makers, and hyperscalers.

The company is capitalizing on the growing PC market, particularly through the introduction of its first PCIe 5.0 controllers, which are responsible for managing data flow between the CPU and components like graphics cards, storage devices, and network cards. This move targets the high-end PC segment, which accounts for ~10-15% of the overall PC market. Its PCIe 5.0 controller, which is the first 6-nanometer 8-channel PCIe Gen5 controller in the market, offers unparalleled performance and best-in-class power consumption.

This entry into the high-end PC market is expected to drive significant revenue and margin growth for Silicon Motion Technology Corp. (NASDAQ:SIMO). The company’s strong position in the market, coupled with its innovative technology, will enable it to further strengthen its market leadership.

Ave Maria Growth Fund stated the following regarding Silicon Motion Technology Corporation (NASDAQ:SIMO) in its first quarter 2024 investor letter:

“Silicon Motion Technology Corporation (NASDAQ:SIMO) is a fabless semiconductor company that specializes in low-end flash memory controllers. Memory manufacturers often design their own controllers in-house, but the rising cost of developing a chip is making it increasingly beneficial to outsource the more commoditized low-end controller development to a third party like Silicon Motion. This outsourcing trend is set to move from consumer applications into the server end market, and Silicon Motion’s new enterprise controller is well positioned to capitalize on the growth.”