Market & Topical Perspectives

The Small Idea: Semiconductor Capital Equipment

The Small Idea: Semiconductor Capital Equipment

First Eagle’s Small Cap team believes small and microcap stocks represent a particularly volatile and inefficiently priced segment of the US equity market—and that these dynamics can create opportunities for disciplined active investment managers. In The Small Idea series, the team offers its perspective on some of the themes and trends impacting this large, diverse pool of domestic companies.

At a time when headlines are dominated by multi-decade-high inflation prints, shifting fiscal and monetary policy, rising interest rates, geopolitical tensions and global health concerns, this golden rule serves as a great reminder of an approach that historically has worked well in the small cap equity market. While we can think of more than a few industries that could benefit from greater investor focus on business execution and opportunity amid the many external distractions, one stands out: semiconductor capital equipment companies.