Markets

Insider Trading

Hedge Funds

Retirement

Opinion

Does Form Factor (FORM) Have a Strong Moat?

Madison Investments, an investment advisor, released its “Madison Small Cap Fund” second-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the second quarter, the fund declined 1.06% outperforming a 3.28% decline for the Russell 2000 Index and a 4.27% decline for the Russell 2500 Index. In the second quarter, the small-cap market was weak. Strong stock selection drove the outperformance. In addition, you can check the fund’s top 5 holdings to know its best picks in 2024.

Madison Small Cap Fund highlighted stocks like FormFactor, Inc. (NASDAQ:FORM) in its Q2 2024 investor letter. FormFactor, Inc. (NASDAQ:FORM) manufactures and sells probe cards, analytical probes, probe stations, metrology systems, thermal systems, and cryogenic systems to semiconductor companies and scientific institutions. The one-month return of FormFactor, Inc. (NASDAQ:FORM) was -3.66%, and its shares gained 62.14% of their value over the last 52 weeks. On July 19, 2024, FormFactor, Inc. (NASDAQ:FORM) stock closed at $55.55 per share with a market capitalization of $4.287 billion.

Madison Small Cap Fund stated the following regarding FormFactor, Inc. (NASDAQ:FORM) in its Q2 2024 investor letter:

Our top performing sector was Information Technology, followed by Consumer Discretionary and Consumer Staples. Strong stock selection drove our outperformance in Information Technology and Consumer Discretionary. In Consumer Staples, contribution was more balanced between selection and allocation. Our best stocks in these respective sectors were Form Factor (FORM), OneSpaWorld (OSW), and Primo Water Corp (PRMW).

FormFactor, Inc. (NASDAQ:FORM) is a semiconductor test equipment company with a clean, cash-rich balance sheet and very little competition. The moat in this business is very high as they integrate tightly with their customers, which are other test and semiconductor companies, and over many generations of products, making new entrants highly unlikely and market share shifts marginal. FORM’s business is driven by a simple equation: new designs plus an increase in test intensity drive revenue growth. Test intensity is defined as how much more testing a new chip design requires over prior generations. The AI DC buildout is driving demand for a new kind of memory chip called High Bandwidth Memory or HBM. Nvidia’s graphic processing units require HBM chips alongside them, and FORM has dominant market share at the current leading HBM maker SK Hynix. Test intensity for HBMs is estimated to be 25% higher than traditional memory. We continue to be optimistic about FORM’s fundamentals, with the understanding that quite a lot of optimism may already be reflected in the stock price.”

A technician soldering a cryogenic amplifier in a laboratory environment.

FormFactor, Inc. (NASDAQ:FORM) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 19 hedge fund portfolios held FormFactor, Inc. (NASDAQ:FORM) at the end of the first quarter which was 19 in the previous quarter. In the first quarter, FormFactor, Inc. (NASDAQ:FORM) reported $168.7 million in revenues a 0.3% increase from Q4 2023 and a 0.8% increase from Q1 2024. The first quarter revenues were above the midpoint of guidance range. While we acknowledge the potential of FormFactor, Inc. (NASDAQ:FORM) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

In another article, we discussed FormFactor, Inc. (NASDAQ:FORM) and shared the list of best quantum computing stocks to invest in. In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

Disclosure: None. This article is originally published at Insider Monkey.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

And this breakthrough has already set off a frenzy among hedge funds and Wall Street’s top investors.

What most investors don’t realize is that one under-owned company holds the key to this $250 trillion revolution.

In fact, Verge argues this company’s supercheap AI technology should concern rivals.

Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.

  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…

But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.

And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…

This prediction might not be bold at all:

A few years from now, you’ll wish you’d owned this stock.

The best part? You can discover everything about this company and its groundbreaking technology right now.

I’ve compiled everything you need to know about this groundbreaking company in a detailed, members-only report.

Trust me — you’ll want to read this report before putting another dollar into any tech stock.

For a ridiculously low price of just $9.99 a month, you can unlock a year’s worth of in-depth investment research and exclusive insights – that’s less than a single fast food meal!

Here’s why this is a deal you can’t afford to pass up:

• Access to our Detailed Report on this Game-Changing AI Stock: Our in-depth report dives deep into our #1 AI stock’s groundbreaking technology and massive growth potential.

• 11 New Issues of Our Premium Readership Newsletter: You will also receive 11 new issues and at least one new stock pick per month from our monthly newsletter’s portfolio over the next 12 months. These stocks are handpicked by our research director, Dr. Inan Dogan.

• One free upcoming issue of our 70+ page Quarterly Newsletter: A value of $149

• Bonus Reports: Premium access to members-only fund manager video interviews

• Ad-Free Browsing: Enjoy a year of investment research free from distracting banner and pop-up ads, allowing you to focus on uncovering the next big opportunity.

• 30-Day Money-Back Guarantee:  If you’re not absolutely satisfied with our service, we’ll provide a full refund within 30 days, no questions asked.

If you’re thinking about getting in, don’t wait – because once Wall Street catches wind of this story, the easy money will be gone.

Space is Limited! Only 1000 spots are available for this exclusive offer. Don’t let this chance slip away – subscribe to our Premium Readership Newsletter today and unlock the potential for a life-changing investment.

Here’s what to do next:

1. Head over to our website and subscribe to our Premium Readership Newsletter for just $9.99 a month.

2. Enjoy a year of ad-free browsing, exclusive access to our in-depth report on the revolutionary AI company, and the upcoming issues of our Premium Readership Newsletter over the next 12 months.

3. Sit back, relax, and know that you’re backed by our ironclad 30-day money-back guarantee.

Don’t miss out on this incredible opportunity! Subscribe now and take control of your AI investment future!

No worries about auto-renewals! Our 30-Day Money-Back Guarantee applies whether you’re joining us for the first time or renewing your subscription a month later!