Clearline Capital Trims Semtech as Post-Sierra Model Drives Earnings

What happened

According to a February 17, 2026, SEC filing, Clearline Capital LP reduced its position in Semtech (SMTC 0.20%) by 412,968 shares during the fourth quarter of 2025. The fund’s quarter-end position in Semtech was valued at $21.07 million, a $28.87 million decrease from the previous quarter, reflecting both share sales and price changes.

What else to know

This transaction was a sale. Following the trade, the position represents 1.04% of Clearline’s 13F reportable assets under management.

Top holdings after the filing:

• NASDAQ: SATS: $96.04 million (7.2% of AUM)
• NASDAQ: CORZ: $68.28 million (5.1% of AUM)
• NASDAQ: TLN: $50.16 million (3.8% of AUM)
• NASDAQ: MU: $48.21 million (3.6% of AUM)
• NYSE: ROG: $43.30 million (3.3% of AUM)

As of February 17, 2026, Semtech shares were priced at $87.66, up 136.6% over the past year, with one-year alpha of 122.59 percentage points versus the S&P 500.

Company/Etf overview

Company/Etf snapshot

Semtech is a leading provider of analog and mixed-signal semiconductor solutions, with a diversified portfolio serving infrastructure, industrial, and consumer electronics markets. Its strategy focuses on innovation in signal integrity, protection, and wireless sensing technologies, supporting high-performance applications in data centers and industrial automation.

Semtech offers analog and mixed-signal semiconductor products, including signal integrity solutions, protection devices, wireless and sensing products, and power management ICs.

It generates revenue by designing and selling integrated circuits and advanced algorithms to original equipment manufacturers and their suppliers, leveraging both direct and distributor sales channels globally.

The company’s primary customers include enterprise computing, communications, consumer, and industrial end-markets across North America, Europe, and Asia-Pacific.

What this transaction means for investors

Semtech is operating in the recovery phase of the semiconductor cycle after a period when excess inventory weighed on orders and earnings. During that downturn, customers reduced purchases while working through built-up stock, pressuring revenue across communications and industrial markets. Over the past year, demand conditions have improved, and the stock has rebounded as expectations reset.

Today’s Semtech combines its legacy analog and signal integrity business with cellular IoT connectivity products gained from its acquisition of Sierra Wireless. That deal expanded its exposure to connected devices and recurring revenue but also increased debt. Growth in connectivity and data infrastructure markets can drive margin expansion, but slower demand or integration missteps would pressure earnings, given the company’s operating leverage and debt load.

For investors, the key thing to watch out for is whether Semtech can leverage its expanded IoT and connectivity platform to secure long-duration design wins that extend beyond the typical semiconductor order cycle. Products embedded in multi-year device and infrastructure programs would moderate earnings swings and support a steadier valuation multiple. Demand that remains tied to short-term chip cycles keeps the stock trading like a high-beta semiconductor name rather than a durable platform business.