We recently published a list of Top 10 Stocks to Buy According to Think Investments. In this article, we are going to take a look at where Silicon Motion Technology Corporation (NASDAQ:SIMO) stands against other top stocks to buy according to Think Investments.

Think Investments is an investment firm based in San Francisco, with additional offices in Singapore and India. The firm focuses on long-term investments in both public and private companies, emphasizing creative research to identify high-potential opportunities. Specializing in technology-driven early-stage businesses, Think Investments partners with its strong management teams to build differentiated companies that generate high returns on invested capital. With a deep understanding of emerging markets and global technology, the firm is well-positioned to navigate complex investment landscapes.

Founded in 2013 by Shashin Shah, Think Investments has established itself as a key player in global markets. The firm has over $1 billion invested in Indian companies operating in the financial services, healthcare, technology, and consumer sectors. Think’s investment strategy is guided by Shah’s extensive experience in global equity markets, ensuring a disciplined approach to capital allocation. The firm’s commitment to long-term value creation has made it a trusted partner for relatively young companies looking to scale efficiently.

Shashin Shah, Founder and Managing Partner, brings decades of expertise in global investing. Before launching Think Investments, he was a partner at Valiant Capital, where he managed multiple international markets, including India, the U.S., Europe, Asia, the Middle East, and North Africa. Shah also worked at Blue Ridge Capital and Morgan Stanley, further honing his investing skills. His academic background includes a bachelor’s degree in computer engineering from the University of Mumbai and an MBA from the University of Texas, equipping him with a strong analytical and financial foundation.

In addition to leading Think Investments, Shah plays an active role in shaping the growth of innovative companies. He currently serves on the boards of Chaayos, a tea café chain, and Dream11, India’s leading fantasy sports platform. His leadership and strategic insights continue to drive Think’s success, solidifying its reputation as a premier investment firm in global markets.

As of its latest filing for the fourth quarter of 2024, Think Investments reported managing approximately $454.51 million in 13F securities, of which the firm’s top ten holdings account for 80.57%.

Our Methodology

The stocks discussed below were picked from Think Investments’ Q4 2024 13F filings. They are compiled in the ascending order of the hedge fund’s stake in them as of December 31, 2024. To assist readers with more context, we have included the hedge fund sentiment regarding each stock using data from 1009 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

An engineer in a lab coat tweaking a circuit board with intricate semiconductors.

Silicon Motion Technology Corporation (NASDAQ:SIMO)

Number of Hedge Fund Holders as of Q4: 39

Think Investments’ Equity Stake: $18.88 Million 

Silicon Motion Technology Corporation (NASDAQ:SIMO) is an American-Taiwanese company specializing in NAND flash controller integrated circuits. The company reported mixed financial results for Q4 2024. While it delivered a positive earnings surprise with earnings per share (EPS) of $0.91, surpassing the expected $0.81, revenue fell short at $191.2 million against the forecasted $196.46 million. However, Silicon Motion has maintained a consistent dividend payout for 13 consecutive years, reinforcing its commitment to shareholder returns.

Despite the sequential revenue decline of 10%, Silicon Motion Technology Corporation (NASDAQ:SIMO) demonstrated resilience with a full-year revenue growth of 26%, reflecting its long-term business strength. The company also reported a steady improvement in profitability, with its gross margin increasing for the seventh consecutive quarter, reaching 47%. Additionally, its operating margin stood at 16.5%; the company ended the quarter with a strong liquidity position, holding $334.3 million in cash and equivalents, which provides flexibility for future investments and growth initiatives.

Looking ahead, Silicon Motion Technology Corporation (NASDAQ:SIMO) aims for mid-single-digit revenue growth in 2025, indicating a cautious yet optimistic outlook. With continued improvements in margins and a focus on innovation in solid-state storage solutions, the company remains well-positioned to navigate industry challenges. As demand for NAND flash controllers continues to expand, Silicon Motion’s strategic positioning and financial discipline could drive long-term value for shareholders, effectively positioning it among the top stocks to buy according to Think Investments.

Following the Board of Directors’ decision on October 28, 2024, Silicon Motion Technology Corporation (NASDAQ:SIMO) will continue to pay an annual dividend of US$2.00 per American Depositary Share (ADS), which signifies US$0.50 per ordinary share, in four equal quarterly installments. The next payout of US$0.50 per ADS is due to be paid on February 27, 2025, to shareholders recorded as of February 13, 2025.

Focus Capital Management stated the following regarding Silicon Motion Technology Corporation (NASDAQ:SIMO) in its Q4 2024 investor letter:

“Silicon Motion Technology Corporation (NASDAQ:SIMO) designs and sells controllers which manage the NAND flash memory ubiquitous in modern computing. Wherever there is NAND flash, there must be a controller, often one from Silicon Motion. SIMO is an ADR (American Depository Receipt) trading on the NASDAQ.

2024 — Growth Across the Board: We just recently discussed at some length in our third quarter letter about Silicon Motion’s strengthening industry position, increasing market share, and growing revenue and margins. Over 2024, revenue has grown 25%+, gross margin has expanded 500 basis points, and net income has about doubled. We will not repeat our points from there at length. We will simply suffice with saying that the future looks even brighter, with continued growth in their core market segments as well as significant growth from their entry into new market segments. Silicon Motion’s entry into the high-end PC market with their PCIe 5.0 controllers is off to a very strong start with major design wins. In fact, Silicon Motion has stated that based on their present design win pipeline, they expect to attain about 50% market share in the high-end PC segment over the next few years, from their present standing start. And their MonTitan enterprise controllers for AI and data centers have already garnered multiple Tier 1 customer wins, with more expected to come, in what is again a greenfield opportunity for the company…” (Click here to read the full text)

Overall, SIMO ranks 10th on our list of top stocks to buy according to Think Investments. While we acknowledge the potential of SIMO, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than SIMO but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

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