MACOM Technology Solutions (MTSI): Can Data Center and 5G Demand Drive More Upside?

MACOM Technology Solutions (MTSI): Can Data Center and 5G Demand Drive More Upside?

Thu, August 20, 2026 at 7:07 PM GMT+3 3 min read

Aristotle Capital Boston, LLC, an investment advisor, released its "Small Cap Equity Fund" Q2 2026 investor letter. A copy of the letter can be downloaded here. The Fund returned 13.69% in the second quarter of 2026, trailing the Russell 2000 Index's 21.49% gain as security selection in information technology and industrials weighed on performance despite positive allocation effects. Top contributors included MACOM Technology Solutions and Mercury Systems, which benefited from strong demand in semiconductor, aerospace, and defense markets, while Alamos Gold and Huron Consulting Group detracted due to operational challenges, weaker gold prices, and investor concerns surrounding artificial intelligence disruption. During the quarter, the fund initiated positions in IPG Photonics and UMB Financial, citing opportunities tied to advanced manufacturing, automation, reshoring trends, and diversified financial services, while exiting Americold Realty Trust, Byline Bancorp, and Verra Mobility. Looking ahead, management remains constructive on U.S. small-cap equities, noting that valuations remain attractive relative to large caps and that earnings growth is expected to accelerate into late 2026 and 2027. Factors such as increased merger and acquisition activity, improving domestic manufacturing due to reshoring and infrastructure investments, and a favorable regulatory environment are expected to support this asset class in the long term. In addition, please check the Fund's top five holdings to know its best picks in 2026.

In its second-quarter 2026 investor letter, Aristotle Small Cap Equity Fund highlighted stocks like MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI). MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI) develops high-performance analog semiconductor solutions for data centers, telecommunications, industrial, and defense applications. The one-month return of MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI) was -5.87% while its shares traded between $120.73 and $418.90 over the last 52 weeks. On August 19, 2026, MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI) stock closed at approximately $269.98 per share, with a market capitalization of about $20.40 billion.

Aristotle Small Cap Equity Fund stated the following regarding MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI) in its Q2 2026 investor letter:

MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI) is a designer and manufacturer of high-performance semiconductor products. The stock benefitted from strong earnings results and forward guidance featuring continued strong revenue and profitability, driven by accelerating demand across data-center, industrial/defense and telecom end markets. We maintain our position, as we believe the company's meaningful exposure to growing demand from data center and 5G end-market applications along with the integration of recent acquisitions and domestic manufacturing footprint should continue to drive shareholder value.

For illustration purposes only. Photo from Pixabay/Pexels

MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. As per our database, 45 hedge fund portfolios held MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI) at the end of the first quarter, which was 35 in the previous quarter. While we acknowledge the risk and potential of MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI) 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 MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI) and shared Carillon Tower Advisers' views on the company. In addition, please check out our hedge fund investor letters Q1 2026 page for more investor letters from hedge funds and other leading investors.

READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years

Disclosure: None. This article is originally published at Insider Monkey.