Indie Semiconductor (INDI) Declined Due to Forward Guidance Miss
Baron Funds, an investment management company, released its 'Baron Discovery Fund' first quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter, the fund was down 6.17% (Institutional Shares), outperforming the -11.12% return for the Russell 2000 Growth Index. The market began strong in February but faded due to Trump's serious tariff enactment, which the market perceives as inflationary and slowing economic growth. The decline accelerated after April 2nd, causing fears of a trade war and global recession. In addition, please check the fund's top five holdings to know its best picks in 2025.
In its first-quarter 2025 investor letter, Baron Discovery Fund highlighted stocks such as Semiconductor, Inc. (NASDAQ:INDI). Indie Semiconductor, Inc. (NASDAQ:INDI) offers automotive semiconductors and software solutions. The one-month return of Indie Semiconductor, Inc. (NASDAQ:INDI) was 42.70%, and its shares lost 58.29% of their value over the last 52 weeks. On May 19, 2025, Indie Semiconductor, Inc. (NASDAQ:INDI) stock closed at $2.64 per share with a market capitalization of $514.515 million.
Baron Discovery Fund stated the following regarding Indie Semiconductor, Inc. (NASDAQ:INDI) in its Q1 2025 investor letter:
"Indie Semiconductor, Inc. (NASDAQ:INDI) designs automotive semiconductors for advanced driver assistance (ADAS), in-cabin features, and other applications. Shares fell during the quarter on a miss in forward revenue guidance due to an inventory correction in the broader automotive semiconductor industry that was exacerbated by continued automotive macroeconomic uncertainty. We retain conviction. Revenue growth continued to outperform peers, and the company is winning new sockets in future platforms. Indie remains well positioned over the medium and long term, supported by its $7.1 billion strategic backlog and its radar, vision, and other programs that will ramp through 2025 and more meaningfully into 2026. We believe indie will return to outsized growth by the end of 2025 and will significantly outpace the broader industry on its path to $1 billion in revenue by the end of this decade supported by contract visibility. As its product mix shifts to ADAS, its margins should meaningfully improve as well."
A semiconductor chip with intricate circuitry, highlighting the company's tech capabilities.
Indie Semiconductor, Inc. (NASDAQ:INDI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 22 hedge fund portfolios held Indie Semiconductor, Inc. (NASDAQ:INDI) at the end of the fourth quarter, compared to 12 in the third quarter. In the first quarter, Indie Semiconductor, Inc. (NASDAQ:INDI) reported revenue of $54.1 million reflecting an increase of 3.3% from a year ago. While we acknowledge the potential of Indie Semiconductor, Inc. (NASDAQ:INDI) 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 undervalued AI stock set for massive gains.
In another article, we covered Indie Semiconductor, Inc. (NASDAQ:INDI) and shared the list of EV penny stocks from $10 to under $1. In addition, please check out our hedge fund investor letters Q1 2025 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.
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