What Makes Semtech Corp. (SMTC) a Key Enabler of AI Data Infrastructure?

Osterweis Capital Management, an investment management firm, highlighted Semtech Corporation (NASDAQ:SMTC) in its Q2 2026 investor update for Osterweis Opportunity Fund. Semtech is a semiconductor company providing analog and mixed-signal chips, IoT systems, and cloud connectivity solutions. The company reported strong growth in its data center and LoRa businesses, which are essential for AI data centers.

Management expects Semtech to grow by 85% in the next quarter and may divest its non-core Sierra Wireless business, boosting gross margins. The company's stock has returned 191.38% over the past year and has a market capitalization of $16.27 billion. Semtech is considered a key supplier in the transition to higher-bandwidth AI interconnect infrastructure.

Although Semtech is not among the 40 most popular stocks among hedge funds, 84 hedge funds held the stock at the end of the second quarter, compared to 56 in the previous quarter. The fund's top five holdings are primarily in Technology, Industrials, Health Care, and Consumer Discretionary sectors. The fund anticipates that while AI will continue influencing economic growth and market performance, a potential consolidation phase for AI-related stocks is expected.