Why Vishay Intertechnology (VSH) Could Benefit From the Electronics Recovery

Why Vishay Intertechnology (VSH) Could Benefit From the Electronics Recovery

Tue, September 1, 2026 at 8:12 PM GMT+3 3 min read

Investment management company First Pacific Advisors recently released its "FPA Queens Road Small Cap Value Fund" second-quarter 2026 investor letter. A copy of the letter can be downloaded here. The Fund returned 27.02% in the first half of 2026, outperforming the Russell 2000 Value Index's 22.99% gain and the S&P 600 Index's 23.90% return. Small-cap earnings growth also began accelerating relative to large caps, while the small-cap technology sector surged nearly 100% in 26H1. The fund's technology holdings gained 72.39%, contributing 14.87 percentage points, compared with a 95.27% return and 7.10-point contribution from the benchmark's technology sector. Excluding IT and cash, the Fund contributed 12.73% versus 15.89% for the Russell 2000 Value Index; on a fully invested basis, the figures were 16.62% and 17.59%, respectively. The portfolio continued to trim appreciated technology holdings amid the AI-driven rally, while maintaining a bottom-up approach and avoiding beaten-down SaaS stocks due to the widening range of AI-related outcomes. The fund also eliminated about $62 million in capital gains during Q2 and approximately $140 million year-to-date through July, while ending the quarter with 10.2% in cash. In addition, please check the Fund's top five holdings to know its best picks in 2026.

In its second-quarter 2026 investor letter, FPA Queens Road Small Cap Value Fund highlighted stocks like Vishay Intertechnology (NYSE:VSH). Vishay Intertechnology (NYSE:VSH) manufactures discrete semiconductors and passive electronic components used across industrial, automotive, and consumer applications. The one-month return of Vishay Intertechnology (NYSE:VSH) was -21.67% while its shares traded between $11.77 and $69.47 over the last 52 weeks. On August 31, 2026, Vishay Intertechnology (NYSE:VSH) stock closed at approximately $30.56 per share, with a market capitalization of about $4.67 billion.

FPA Queens Road Small Cap Value Fund stated the following regarding Vishay Intertechnology (NYSE:VSH) in its Q2 2026 investor letter:

"Vishay Intertechnology (NYSE:VSH) makes passive electronic components and discrete semiconductors (resistors, inductors, capacitors, MOSFETs, diodes, etc). Although the industry is cyclical, competitive dynamics are stable and VSH benefits from incremental growth from electric vehicles and industrial electrification. A year ago, the industry was struggling from a cyclical downturn following the excesses and component hoarding of the Covid era. The stock declined again when President Trump announced his tariffs in April 2025. But the industry has come roaring back; VSH's Q1 earnings release on May 13 announced a year-over-year sales increase of 17%, strength across all end markets and distribution channels, and a book-to-bill ratio of 1.34. Vishay is also incrementally selling to data centers. We believe the stock may have gotten caught up in the "AI trade" and have aggressively reduced our position" (Click Here To Read The Letter In Detail).

For illustration purposes only. Photo from Pixabay/Pexels

Vishay Intertechnology (NYSE:VSH) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. As per our database, 71 hedge fund portfolios held Vishay Intertechnology (NYSE:VSH) at the end of the first quarter, which was 34 in the previous quarter. While we acknowledge the risk and potential of Vishay Intertechnology (NYSE:VSH) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on thebest short-term AI stock.

In another article, we covered Vishay Intertechnology (NYSE:VSH) and shared the list of Wall Street's Biggest Earnings Winners. In addition, please check out our hedge fund investor letters Q1 2026 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.