BlackRock Increases Stake in Israeli Chip Equipment Maker Nova to Nearly 7%

BlackRock, the global asset management giant, has purchased over 560,000 shares of Nova, an Israeli chip manufacturing control systems company, since its last report, investing more than 800 million shekels since the start of 2023. This latest acquisition raised BlackRock's ownership in Nova from 5.26% to 6.8%, as disclosed by Nova on July 29. Nova, which designs, develops, and manufactures control systems primarily for major technology firms, is publicly traded on both the Tel Aviv and New York stock exchanges.

Over the past five years, Nova's stock price surged 295%, reaching a market capitalization of 36 billion shekels. The company has no controlling shareholder; major stakeholders include Harel (10%), Fidelity (9%), Migdal (7.8%), and Menora Pension Funds (6.3%). In the last three years, Nova's shares rose 168%, driven by growing demand for semiconductors amid massive investments by tech giants in AI development and production. Despite a 22% drop in July amid a global semiconductor sector downturn, Nova's stock has gained 15% year-to-date.

BlackRock's increased stake likely reflects adjustments to index fund exposures, as Nova is included in the NASDAQ, PHLX Semiconductor, and Israeli TA-35 and TA-125 indices. While BlackRock is known for passive index fund management, it also runs active equity funds, so the purchase may also represent an active investment decision.

Nova recently reported record financial results for Q1 2023, with revenues rising 10% year-over-year to $235 million and net profit increasing 6% to $69 million. However, these gains were partially offset in shekel terms due to a nearly 10% strengthening of the Israeli shekel against the US dollar over the past year.