Loomis Sayles, an investment management company, recently released its fourth-quarter 2025 investor letter for its Small Cap Growth Fund. The firm reported that small caps’ earnings are reaccelerating in 2025, as previously forecasted, and the market experienced a low-quality rally within the small-cap space. Despite this backdrop, the Small Cap Growth Fund underperformed the Russell 2000 Growth Index benchmark in the quarter, returning 0.51% compared to 1.22% for the benchmark. Looking ahead to 2026, there are many reasons to feel positive about the economy, earnings growth, and the stock market. Investors are encouraged to review the Fund’s top five holdings to gain insights into their key selections for 2025.
One of the leading contributors highlighted in the fourth-quarter 2025 investor letter was MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI). MACOM Technology Solutions Holdings is a high-power analog semiconductor solutions provider serving applications across radio frequency (RF), microwave, millimeter wave, and lightwave spectrum. The stock closed at $237.23 per share on March 24, 2026, with a one-month return of -6.37% and a 124.54% gain over the past 52 weeks. The company has a market capitalization of $17.795 billion.
Loomis Sayles Small Cap Growth Fund praised MACOM Technology Solutions Holdings in its investor letter, stating that it is a high-growth analog semiconductor company with exposure to the data center and defense end markets, both of which are experiencing significant growth. The company’s share gains from new products and self-help initiatives driving margins higher have contributed to its growth. MACOM Technology Solutions Holdings’ unique positioning, along with higher revenue and earnings revisions, have propelled the stock to the upper bands of its peer group valuation.
Despite its positive performance, MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI) is not among the 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. However, 35 hedge fund portfolios held the stock at the end of the fourth quarter, consistent with the previous quarter. While acknowledging the potential of MACOM Technology Solutions Holdings as an investment, some believe that certain AI stocks offer greater upside potential and carry less downside risk. For investors seeking an undervalued AI stock that could benefit from Trump-era tariffs and the onshoring trend, a free report on the best short-term AI stock is available.
In conclusion, Loomis Sayles’ Small Cap Growth Fund remains optimistic about the economy, earnings growth, and the stock market in 2026. MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI) stands out as a top contributor to the Fund’s performance, driven by its high-growth trajectory and strategic positioning in key markets. Investors are encouraged to consider the Fund’s top holdings and explore potential opportunities in the small-cap space for the year ahead.
