Artisan Partners, an investment management company, released its fourth-quarter 2025 investor letter for “Artisan Mid Cap Fund”.  A copy of the letter can be downloaded here. The Fund seeks to invest in companies that possess franchise characteristics, with strong earnings trajectories, and are trading at a discount to the estimated private market value. US equities ended a record year with robust fourth-quarter gains. The Fund’s Investor Class, ARTMX, delivered -0.44%, the Advisor Class, APDMX, delivered - ...

Core Insights - The Active Copper Cable Multi-Source Agreement (ACC-MSA) has been established to enhance interoperability and innovation in next-generation copper interconnect solutions [1][5] - The consortium aims to address key industry challenges by reducing power, cost, and latency while improving performance for high-speed copper interconnects [1][5] Group 1: Consortium Formation - Thirteen global leaders in networking, semiconductors, and cabling have formed the ACC-MSA, co-chaired by MACOM and Semtech [2] - Founding members include major companies such as AMD, Cisco, Dell Technologies, NVIDIA, and others [2] Group 2: Technical Focus - The initial focus of the ACC-MSA is on optimized copper interconnects featuring integrated linear equalizers [3] - Specifications will cover electrical, firmware, and testing requirements to ensure interoperability among various vendors [3] Group 3: Industry Impact - The integration of linear equalizers is expected to extend the reach of copper cabling, reduce thickness, and lower power consumption and latency compared to traditional DSP-based solutions [4] - AI hardware infrastructure spending is projected to exceed $1 trillion by 2029, with networking infrastructure nearing $200 billion, highlighting the importance of ACCs in future deployments [4]

MACOM Technology Solutions Holdings Inc. (NASDAQ:MTSI) is one of the best NASDAQ growth stocks to buy for the next 2 years. On February 5, MACOM Technology Solutions delivered revenue of $271.6 million for FQ1 2026, which was a 24.5% year-over-year increase, while adjusted EPS totaled $1.02. Industrial & Defense and Data Center markets are reaching all-time high revenue levels of $117.7 million and $85.8 million, respectively. The Data Center segment prompted management to raise its full-year growth outl ...

Aristotle Capital Boston, LLC, an investment advisor, released its fourth-quarter investor letter for “Small Cap Equity Fund”. A copy of the letter can be downloaded here. U.S. small-cap equities reported modest gains in the fourth quarter of 2025. The quarter started as a continuation of the post-Liberation Day risk-on market environment, while it ended on a strong note, driven by a positive macroeconomic backdrop. Attractive valuations, earnings recovery, broadening of the market, and a shift from mega-ca ...

Summary of Conference Call Notes on US Semiconductors Industry Overview - The analog semiconductor sector is experiencing a recovery, with estimates increasing by 2% for CY26 and CY27E [1][25] - Industrial and data center segments are leading the recovery, while the automotive sector is lagging [1] - Key indicators such as bookings, backlog, and lead times are showing positive trends across suppliers [1] - The macroeconomic environment for industrial sectors is improving, with US PMIs at 52.6 in January [1] Sales and Earnings Growth - Sales for analog semiconductors are projected to grow at a median CAGR of 10% from CY25 to CY28E, significantly higher than previous periods [2] - EPS is expected to grow at a CAGR of 32% for CY25-28E, driven by improved gross margins and operational discipline [2] - Notable growth leaders include MCHP and ADI, while automotive semiconductors are trailing with less than 10% CAGR [2] Company-Specific Insights NXP Semiconductors (NXPI) - NXPI is optimistic about channel replenishment and aims for ~$15.5 billion in sales for CY27, which is 4% above market expectations [3] - The company is focused on software-defined vehicles (SDV) and advanced driver-assistance systems (ADAS) [3][15] - NXPI has strong design-win visibility, particularly in core electronics and infotainment systems [15] Microchip Technology (MCHP) - MCHP is experiencing normalization in distribution sell-in/sell-through, although direct customer trends are softer [3] - The company is seeing growth in data center and aerospace & defense (A&D) sectors, which are contributing to long-term growth [3][20] - MCHP's growth is primarily content-based, with no significant production growth expected [20] Investment Recommendations - Top picks include ADI for large caps and MTSI for small to mid-caps due to their strong margins and growth potential [4] - NXPI is favored for its consistent execution and attractive valuation, while ON is rated neutral due to challenges in the EV/auto market [4] - TXN's acquisition of Silicon Laboratories (SLAB) is seen as a strategic move to enhance its wireless connectivity portfolio [7] Acquisition Insights - TXN announced the acquisition of SLAB for $7.5 billion, expected to close in 1H27 [7] - The deal is anticipated to generate over $450 million in cost synergies within three years [7][9] - TXN's internal utilization and growth in the embedded market are expected to improve post-acquisition [8] Financial Projections - TXN's pro forma financials suggest EPS accretion of 2.5% in CY27 and 5% in CY28, with potential for further gains from revenue synergies [9][10] - The overall industry is seeing a return to historical median valuations, with CY27 PEs aligning closer to historical averages [4] Additional Considerations - The semiconductor industry is witnessing consolidation, which may lead to improved operational efficiencies [7] - There are concerns regarding auto input cost inflation and its impact on gross margins, particularly for NXPI [13][15] - The competitive landscape in the automotive sector is evolving, with local vendors gaining traction in China [15] This summary encapsulates the key points from the conference call notes, highlighting the current state and future outlook of the semiconductor industry, along with specific insights into leading companies and investment opportunities.

Core Viewpoint - MACOM Technology (MTSI) is positioned as a high-performing RF semiconductor company, suggesting a strong market presence and potential for growth in the semiconductor industry [1]. Group 1 - The company is recognized for its quality, indicating that it may command a premium in the market [1].

Core Insights - MACOM Technology Solutions Holdings, Inc. (MTSI) reported first-quarter fiscal 2026 earnings of $1.02 per share, exceeding the Zacks Consensus Estimate of 99 cents per share, with a year-over-year growth of 29.1% [1] - The company has consistently beaten earnings estimates in the past four quarters, with an average surprise of 1.61% [1] Revenue Performance - MTSI posted revenues of $271.6 million in the first quarter of fiscal 2026, surpassing the Zacks Consensus Estimate by 1%, and reflecting a year-over-year increase of 24.5% [2] Operating Metrics - The adjusted gross margin for the first quarter of fiscal 2026 was 57.6%, slightly up from 57.5% in the prior-year quarter [3] - Adjusted operating income reached $73.97 million, an increase from $55.4 million in the year-ago period, representing 27.2% of revenues, up 180 basis points year-over-year [3] Operating Expenses - Non-GAAP operating expenses were $82.5 million, an 18% increase year over year, but as a percentage of revenues, they contracted 170 basis points to 30.4% [4] Balance Sheet and Cash Flow - As of January 2, 2026, cash equivalents and short-term investments totaled $768.5 million, down from $785.9 million in the prior quarter [5] - Long-term debt was reported at $339.91 million, slightly up from $339.63 million in the previous quarter [5] - Net cash flows from operating activities amounted to $42.93 million [5] Guidance for Q2 FY26 - For the second quarter of fiscal 2026, MTSI expects revenues between $281 million and $289 million, with the Zacks Consensus Estimate at $274.54 million, indicating a year-over-year growth of 16.4% [6] - The company anticipates adjusted earnings per share between $1.05 and $1.09, compared to the Zacks Consensus Estimate of $1.02 per share, suggesting a growth of 20% year over year [6] Market Position - MTSI currently holds a Zacks Rank 3 (Hold) [7] - Competitors such as Amphenol (APH), Broadcom (AVGO), and BILL Holdings, Inc. (BILL) are rated higher with a Zacks Rank 1 (Strong Buy) [7]

Core Insights - MACOM Technology Solutions reported strong demand across its end markets, with revenue growth of 24.5% year-over-year and a record backlog, indicating a positive outlook for the company through calendar 2027 [1][2][4] Financial Performance - Fiscal Q1 2026 revenue was $271.6 million, with adjusted earnings per diluted share of $1.02, supported by robust demand in industrial and defense, data center, and telecom sectors [2][4] - The adjusted gross margin was 57.6%, with record adjusted operating income of $74.0 million, and the company ended the quarter with $768 million in cash and short-term investments [3][14] - The company guided Q2 revenue to be between $281 million and $289 million, with adjusted EPS projected at $1.05 to $1.09 [4][14] Market Segments - Data center revenue growth target was raised to 35%-40% year-over-year, up from a previous target of 20%, driven by demand for 800G and 1.6T optics [4][5] - In industrial and defense, MACOM is positioned as a supplier of choice among large U.S. defense OEMs, focusing on high-frequency and high-power RF/microwave solutions [10] - The telecom segment is seeing growth opportunities in satellite broadband and direct-to-cell applications, with a $55 million satellite contract expected to start production in the second half of calendar 2026 [11][12] Product Development - The company is focusing on near-packaged and co-packaged optics, with confirmed customer qualifications for its 75-milliwatt CW lasers [7] - MACOM is also supporting various optical transmission technologies and is seeing growth in pluggable optical modules tied to 800G and 1.6T PAM4 [8][9] Strategic Outlook - Management expressed confidence in the data center market, citing strong bookings and a healthy backlog, with expectations for stronger performance in the second half of the fiscal year [6][10] - The company does not plan to engage in share repurchases, focusing instead on retiring convertible notes and maintaining a strong balance sheet [3][14]

Core Viewpoint - M/A-Com Technology Solutions Holdings, Inc. (NASDAQ:MTSI) is recognized for its strong performance in the semiconductor industry, particularly in the analog and mixed segment, with a recent stock upgrade to "Outperform" by Evercore ISI [1][6] Financial Performance - MTSI reported earnings of $1.02 per share for the first quarter, exceeding the Zacks Consensus Estimate of $0.99 and showing a significant increase from $0.79 per share in the same quarter last year, resulting in an earnings surprise of +2.69% [2] - The company's revenue for the quarter reached $271.61 million, surpassing the Zacks Consensus Estimate by 1% and marking a substantial increase from $218.12 million recorded in the previous year [3] - MTSI has consistently outperformed consensus EPS and revenue estimates over the past four quarters, indicating strong financial performance [3] Operational Efficiency - The gross margin improved to 55.9%, up from 53.7% in the previous year's first quarter, reflecting enhanced operational efficiency [4] - Income from operations rose significantly to $43.3 million, or 15.9% of revenue, compared to $17.5 million, or 8.0% of revenue, in the previous year [4] Stock Performance - MTSI's stock price is currently at $227.80, reflecting an increase of 5.94% or $12.77, with a market capitalization of approximately $17.09 billion [5] - The stock has fluctuated between $197.83 and $232.09 on the trading day, with a trading volume of 2,514,203 shares on the NASDAQ exchange [5]

Financial Performance - Revenue increased by $53.5 million, or 24.5%, to $271.6 million for the three months ended January 2, 2026, compared to $218.1 million for the same period in 2025[124] - Gross profit for the three months ended January 2, 2026, was $151.8 million, representing a gross margin of 55.9%, up from 53.7% in the prior year[122] - Income from operations rose to $43.3 million for the three months ended January 2, 2026, compared to $17.5 million for the same period in 2025, reflecting an operating margin increase from 8.0% to 15.9%[122] - Net income for the three months ended January 2, 2026, was $48.8 million, a significant improvement from a net loss of $167.5 million in the prior year[122] Expenses - Research and development expenses increased to $66.5 million, representing 24.5% of revenue, down from 27.7% in the prior year[122] - Selling, general and administrative expenses were $42.0 million, or 15.5% of revenue, compared to 18.0% in the same period last year[122] - Research and development expenses rose by $6.1 million, or 10.1%, to $66.5 million, representing 24.5% of revenue, primarily due to increased employee-related costs[130] - Selling, general and administrative expenses increased by $2.8 million, or 7.2%, to $42.0 million, accounting for 15.5% of revenue[131] Market Growth Expectations - The company expects revenue growth in the Industrial and Defense market driven by an expanding product portfolio and increased applications for multi-market catalog products[111] - Future revenue growth in the Data Center market is anticipated due to the adoption of higher speed processing technologies and upgrades to data center architectures[112] - Telecom market revenue is expected to grow with the continued deployment of 5G and expansion of communications equipment[113] Market Revenue Performance - Industrial & Defense market revenue increased by $20.3 million, or 20.9%, to $117.7 million for the three months ended January 2, 2026, driven primarily by defense program growth[125] - Data Center market revenue rose by $20.5 million, or 31.4%, to $85.8 million for the same period, mainly due to higher sales of high-performance products supporting data rates from 100G to 1.6T[126] - Telecom market revenue grew by $12.7 million, or 22.9%, to $68.1 million, primarily driven by increased sales for 5G and broadband applications[127] Cash and Liquidity - Cash and cash equivalents at the end of the period were $119.6 million, down from $232.7 million at the beginning of the period[136] - Net cash provided by operating activities was $42.9 million, with a net income of $48.8 million for the three months ended January 2, 2026[137] - As of January 2, 2026, the company held $648.8 million in liquid short-term investments, indicating strong liquidity for future growth and working capital needs[143] Tax Rate - The estimated annual effective tax rate for the fiscal year ending October 2, 2026, is expected to be approximately 16.2%[134]