Baron Funds, an investment management company, released its “Baron Technology Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. After a slow start to the quarter, U.S. stocks increased steadily in May and June. In the second quarter, the fund rose 7.09% (Institutional Shares) underperforming an 11.38% return for the MSCI ACWI Information Technology Index (the Benchmark) and outperforming the 4.28% gain for the S&P 500 index. For the first half of 2024, the fund delivered solid returns, increasing 22.86% compared to 24.80% and 15.29% returns for the indexes. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Baron Technology Fund highlighted stocks like Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), in the second quarter 2024 investor letter. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) manufactures, packages, tests, and sells integrated circuits and other semiconductor devices. The one-month return of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) was -2.05%, and its shares gained 82.62% of their value over the last 52 weeks. On September 5, 2024, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) stock closed at $163.70 per share with a market capitalization of $848.961 billion.
Baron Technology Fund stated the following regarding Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its Q2 2024 investor letter:
“Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), the world’s leading semiconductor foundry, contributed to performance in the second quarter, driven by continued strong data center AI accelerator demand, optimism on a potential edge AI replacement cycle for smartphones and PCs, and expectations for price hikes next year (“selling our value,” in the words of C.C. Wei, TSMC’s CEO). In contrast with the sluggish broader semiconductor foundry market, TSMC is enjoying a record[1]breaking year, with management guiding for revenue to grow in the low to mid-20% range year-over-year in 2024, thanks to the company’s near[1]monopoly in manufacturing the world’s most advanced chips. According to C.C. Wei, “almost all the AI innovators are working with TSMC to address the insatiable AI-related demand for energy-efficient computing.” This strong AI demand, coupled with TSMC’s unrivaled competitive position, is driving “a high level of customer interest and engagement at N2” (TSMC new process node which will start production in 2H25), with N2 revenue expected to “certainly be larger” and with a “better margin profile” than N3 (TSMC’s most advanced node today). We believe TSMC will sustain strong double-digit earnings growth for years to come, driven by rapidly growing demand for advanced chips and continued market share gains enabled by its superior technology, reliability, and customer service.”
A close-up of a complex network of integrated circuits used in logic semiconductors.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is in 11th position on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 156 hedge fund portfolios held Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) at the end of the second quarter which was 135 in the previous quarter. The second quarter revenue of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) increased 13.6% sequentially in NT or 10.3% in U.S. dollars. While we acknowledge the potential of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) 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 Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) and shared the list of unstoppable artificial intelligence (AI) stocks to buy. Ariel Global Fund benefitted from the performance of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) during Q2 2024. In addition, please check out our hedge fund investor letters Q2 2024 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.
